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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED MARCH 31, 2007
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO _______________
 Commission File Number: 1-6776
 CENTEX CORPORATION
 (Exact name of registrant as specified in its charter)
 Nevada
(State of incorporation)
    
    75-0778259
(I.R.S. Employer Identification No.)
 2728 N. Harwood, Dallas, Texas
75201
(Address of principal executive offices)
(Zip Code)
 (214) 981-5000
(Registrants telephone number, including area code)
  Title of each class
Common Stock ($ .25 par value)
    
    Name of each exchange on which registered
New York Stock Exchange
  þ o
 o þ
 þ o
 þ
  þ o o
 o þ
  DOCUMENTS INCORPORATED BY REFERENCE




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##### Table of Contents



FORM 10-K
 March 31, 2007
 TABLE OF CONTENTS
 PART IItem 1.
    
    Business
    
    
    1Item 1A.
    
    Risk Factors
    
    
    9Item 1B.
    
    Unresolved Staff Comments
    
    
    15Item 2.
    
    Properties
    
    
    16Item 3.
    
    Legal Proceedings
    
    
    16Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    16Item 4A.
    
    Executive Officers of the Registrant
    
    
    17PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Repurchases of Equity Securities
    
    
    18Item 6.
    
    Selected Financial Data
    
    
    20Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    52Item 8.
    
    Financial Statements and Supplementary Data
    
    
    54Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    96Item 9A.
    
    Controls and Procedures
    
    
    96Item 9B.
    
    Other Information
    
    
    96PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    96Item 11.
    
    Executive Compensation
    
    
    96Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    96Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    97Item 14.
    
    Principal Accountant Fees and Services
    
    
    97PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    97SIGNATURES
    
    
    
    
    103Form of Award AgreementForm of Stock Option AgreementForm of Deferred Compensation AgreementComputation of Ratio of Earnings to Fixed ChargesList of SubsidiariesConsent of Independent Registered Pulic Accounting FirmPowers of AttorneyCertification of CEO Pursuant to Rule 13a-14(a)Certification of CFO Pursuant to Rule 13a-14(a)Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
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PART I
 
 ITEM 1. BUSINESS
 General Development of Business
      Business
    
    Date
    
    DescriptionConstruction Services
    
    March 2007
    
    We sold our commercial
construction operations,
which were previously a
separate reporting
segment.Home Equity
    
    July 2006
    
    We sold our sub-prime home
equity lending operations,
which were previously
included in the Financial
Services segment.International Homebuilding
    
    September 2005
    
    We sold our international
homebuilding operations,
which were previously
included in the Home
Building segment.Commercial Real Estate
    
    February 2004
    
    We simplified the
organizational structure
of the Company and its
affiliates by acquiring a
company whose publicly
traded securities had
previously traded in
tandem with our common
stock. Those operations
have largely been
liquidated.Construction Products
    
    January 2004
    
    We made a tax-free
spin-off to our
stockholders of our equity
interests in our
construction products
operations, which were
previously a separate
reporting segment.Manufactured Homes
    
    June 2003
    
    We made a tax-free
spin-off to our
stockholders of
substantially all of our
manufactured housing
operations, which were
previously included in our
Other segment.
  1




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Financial Information about Segments
  Narrative Description of Business
 HOME BUILDING
  Markets
  2




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Segment
    
    States
    
    Markets
    
    States and Markets (continued)East
    
    Georgia
    
    Savannah
    
    North
    
    WilmingtonMaryland
    
    Bethesda/Frederick/Gaithersburg
    
    Carolina (cont)
    
    Winston-SalemWashington, D.C./Arlington/Alexandria
    
    South
    
    Charleston/N. CharlestonNew Jersey
    
    Edison
    
    Carolina
    
    Myrtle Beach/Conway/Newark/Union
    
    
    
    N. Myrtle BeachNew York/Wayne/White Plains
    
    Virginia
    
    RichmondNorth Carolina
    
    Charlotte/Gastonia/Concord
Durham
    
    
    
    Virginia Beach/Norfolk/
    Newport NewsGreensboro/High Point
    
    
    
    WinchesterRaleigh/CarySoutheast
    
    Florida
    
    Cape Coral/Ft. Myers
    
    Florida (cont)
    
    Tampa/St. Petersburg/ClearwaterFt. Lauderdale/Pompano Beach/
    
    
    
    Vero BeachDeerfield Beach
    
    
    
    West Palm Beach/BocaJacksonville
    
    
    
    Raton/Boynton BeachNaples/Marco Island
    
    Georgia
    
    Atlanta/Sandy Springs/MariettaOrlando
    
    Tennessee
    
    Nashville/Davidson/Port St. Lucie/Ft. Pierce
    
    
    
    MurfreesboroPunta GordaSarasota/Bradenton/VeniceCentral
    
    Indiana
    
    Indianapolis
    
    Minnesota
    
    Minneapolis/St. Paul/BloomingtonIllinois
    
    Chicago/Naperville/Joliet
    
    
    
    RochesterMichigan
    
    Ann Arbor
    
    Missouri
    
    St. LouisDetroit/Livonia/Dearborn
    
    Ohio
    
    AkronFlint
    
    
    
    ColumbusMonroe
    
    
    
    ToledoWarren/Farmington Hills/Troy
    
    Pennsylvania
    
    PittsburghTexas
    
    Texas
    
    Austin/Round Rock
    
    Texas (cont)
    
    Houston/Baytown/Sugar LandDallas/Plano/Irving
    
    
    
    Killeen/Temple/Ft. HoodFt. Worth/Arlington
    
    
    
    San AntonioNorthwest
    
    California
    
    Bakersfield
    
    California
    
    Visalia/PortervilleFresno
    
    (cont)
    
    Yuba CityHanford/Corcoran
    
    Colorado
    
    Denver/AuroraMerced
    
    
    
    Ft. Collins/LovelandModesto
    
    
    
    GreeleyOakland/Fremont/Hayward
    
    Hawaii
    
    HonoluluSacramento/Arden/Arcade/Roseville
    
    Nevada
    
    Reno/SparksSan Jose/Sunnyvale/Santa Clara
    
    Oregon
    
    Portland/Vancouver/BeavertonStockton
    
    Washington
    
    Seattle/Bellevue/EverettSouthwest
    
    Arizona
    
    Phoenix/Mesa
    
    Nevada
    
    Las Vegas/ParadiseCalifornia
    
    El Centro
    
    New Mexico
    
    AlbuquerqueLos Angeles/Long Beach/Glendale
Oxnard/Thousand Oaks/Ventura
Riverside/San Bernardino/Ontario
San Diego/Carlsbad/San Marcos
San Luis Obispo/Paso Robles
Santa Ana/Anaheim/Irvine
    
    
    
    Santa FeOther 
homebuilding
    
    Other homebuilding
includes ancillary businesses (such as framing, carpet and
holding companies), and projects that we plan to build out and
liquidate in the following states: Florida, New Hampshire, North Carolina and Texas. In addition,
Other homebuilding includes amounts consolidated under the caption land held under option agreements not owned and capitalized
interest for all regions.
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Units Closed:
 For the Years Ended March 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003East
    
    
    6,720
    
    
    
    7,116
    
    
    
    5,674
    
    
    
    5,064
    
    
    
    4,416Southeast
    
    
    5,374
    
    
    
    6,426
    
    
    
    4,867
    
    
    
    4,594
    
    
    
    4,066Central
    
    
    4,789
    
    
    
    5,971
    
    
    
    5,593
    
    
    
    4,990
    
    
    
    3,927Texas
    
    
    7,083
    
    
    
    6,899
    
    
    
    6,173
    
    
    
    6,055
    
    
    
    6,041Northwest
    
    
    4,709
    
    
    
    4,580
    
    
    
    3,740
    
    
    
    3,121
    
    
    
    2,602Southwest
    
    
    6,209
    
    
    
    6,786
    
    
    
    5,614
    
    
    
    4,981
    
    
    
    4,136Other homebuilding
    
    
    901
    
    
    
    1,454
    
    
    
    1,726
    
    
    
    1,553
    
    
    
    1,23935,785
    
    
    
    39,232
    
    
    
    33,387
    
    
    
    30,358
    
    
    
    26,427Average Revenue Per Unit (in
000s)
    
    $
    308
    
    
    $
    304
    
    
    $
    270
    
    
    $
    242
    
    
    $
    220
 Sales Orders (in Units):
 For the Years Ended March 31,2007
    
    2006
    
    2005
    
    2004
    
    2003East
    
    
    5,495
    
    
    
    6,840
    
    
    
    6,431
    
    
    
    5,616
    
    
    
    5,017Southeast
    
    
    3,425
    
    
    
    5,703
    
    
    
    6,125
    
    
    
    5,294
    
    
    
    4,334Central
    
    
    4,271
    
    
    
    5,636
    
    
    
    5,346
    
    
    
    5,320
    
    
    
    4,329Texas
    
    
    6,914
    
    
    
    6,994
    
    
    
    6,508
    
    
    
    6,250
    
    
    
    5,685Northwest
    
    
    4,300
    
    
    
    4,597
    
    
    
    4,211
    
    
    
    3,627
    
    
    
    3,037Southwest
    
    
    4,539
    
    
    
    7,196
    
    
    
    6,137
    
    
    
    5,694
    
    
    
    4,755Other homebuilding
    
    
    105
    
    
    
    1,064
    
    
    
    1,804
    
    
    
    1,921
    
    
    
    1,51129,049
    
    
    
    38,030
    
    
    
    36,562
    
    
    
    33,722
    
    
    
    28,668
 Backlog Units:
 As of March 31,2007
    
    2006
    
    2005
    
    2004
    
    2003East
    
    
    1,848
    
    
    
    3,073
    
    
    
    3,349
    
    
    
    2,592
    
    
    
    2,040Southeast
    
    
    1,519
    
    
    
    3,468
    
    
    
    4,191
    
    
    
    2,933
    
    
    
    2,233Central
    
    
    1,744
    
    
    
    2,262
    
    
    
    2,597
    
    
    
    2,844
    
    
    
    2,514Texas
    
    
    2,020
    
    
    
    2,189
    
    
    
    2,094
    
    
    
    1,759
    
    
    
    1,564Northwest
    
    
    1,805
    
    
    
    2,214
    
    
    
    2,197
    
    
    
    1,726
    
    
    
    1,220Southwest
    
    
    1,503
    
    
    
    3,173
    
    
    
    2,763
    
    
    
    2,240
    
    
    
    1,527Other homebuilding
    
    
    212
    
    
    
    1,008
    
    
    
    1,398
    
    
    
    1,320
    
    
    
    95210,651
    
    
    
    17,387
    
    
    
    18,589
    
    
    
    15,414
    
    
    
    12,050
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Competition and Other Factors
      6




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FINANCIAL SERVICES
     For the Years Ended March 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Loan Types (originations):Builder
    
    
    27,141
    
    
    
    27,364
    
    
    
    22,517
    
    
    
    20,865
    
    
    
    18,127Retail (1)
    
    
    30,638
    
    
    
    43,319
    
    
    
    44,816
    
    
    
    67,481
    
    
    
    66,80757,779
    
    
    
    70,683
    
    
    
    67,333
    
    
    
    88,346
    
    
    
    84,934Origination Volume (in millions)
    
    $
    13,826.0
    
    
    $
    15,827.4
    
    
    $
    13,039.0
    
    
    $
    15,116.0
    
    
    $
    13,991.2Percent of Home Buildings
Closings Financed(2)
    
    
    80
    %
    
    
    75
    %
    
    
    73
    %
    
    
    74
    %
    
    
    73
    %
 
 (1)
    
    Over the last five fiscal years, the reduction in retail loan originations is primarily
attributable to decreases in refinancing activity and homebuyer demand, and our strategic
decision to reduce the number of retail loan officers.(2)
    
    Excludes non-financed cash-only closings.     7




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Competition and Other Factors
    8




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EMPLOYEES
  Line of Business
    
    EmployeesHome Building
    
    
    6,668Financial Services
    
    
    2,787Other
    
    
    1,963Total
    
    
    11,418
  NYSE AND SEC CERTIFICATIONS
  AVAILABLE INFORMATION
  
 ITEM 1A. RISK FACTORS
  HOME BUILDING
 The homebuilding industry is undergoing a significant downturn; further deterioration in industry
conditions generally or in the markets where we operate could decrease demand and pricing for new
homes and have a material adverse effect on our results of operations.
  9




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The market value of land may fluctuate significantly, which can result in significant decreases in
the value of our developed and undeveloped land holdings.
  Continued cancellations of existing sales contracts may have a material adverse effect on our
business.
  Increases in interest rates could make it more difficult or costly for customers to purchase our
homes.
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Competition for homebuyers could reduce our closings or decrease our profitability.
   The lag between when we acquire land and when we sell homes in our neighborhoods can make our
operations susceptible to the effects of rapid changes in market conditions.
  We may not be able to acquire land suitable for residential homebuilding at reasonable prices,
which could limit our ability to expand our homebuilding operations and increase our costs.
  Government entities have adopted or may adopt slow or no growth initiatives, which could adversely
affect our operations.
  Natural disasters and adverse weather conditions could delay closings or increase costs to build
new homes in affected areas.
  11




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Supply or labor shortages and other risks related to the demand for building materials and skilled
labor could delay closings and affect our results of operations.
  Compliance with regulatory requirements affecting our business could have substantial costs both in
time and money, and some regulations could prohibit or restrict some homebuilding activity.
   We may incur increased costs related to repairing construction defects in the homes we sell.
  An inability to obtain bonding could limit the number of projects we are able to pursue.
  12




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FINANCIAL SERVICES
 General business, economic and market conditions may significantly affect the earnings of our
Financial Services operations.
   The mortgage financing industry is highly competitive.
  Changes in lending laws could hurt our Financial Services operations.
  The volatility of our Financial Services operations due to refinancing activity could negatively
impact operations.
  FACTORS AFFECTING MULTIPLE BUSINESS SEGMENTS
 Market conditions in the sub-prime lending industry have worsened significantly, which could cause
lenders to tighten qualifications for mortgages and reduce the availability of credit for some
purchasers of our homes and reduce the population of potential mortgage customers.
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Our income tax provision and other tax reserves may be insufficient if any taxing authorities are
successful in asserting tax positions that are contrary to our position.
   New federal laws that adversely affect liquidity in the secondary mortgage market could hurt our
business.
  We could be adversely affected by a change in our credit rating or a disruption in the capital
markets.
   Reductions in tax benefits could make home ownership more expensive or less attractive.
  14




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FORWARD-LOOKING STATEMENTS
 This report includes various forward-looking statements, which are not facts or guarantees of
future performance and which are subject to significant risks and uncertainties.
   10-K,
 
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  15




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ITEM 2. PROPERTIES
     
 ITEM 3. LEGAL PROCEEDINGS
     
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  16




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ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
  Name
    
    Age
    
    Positions with Centex or Business ExperienceDavid L. Barclay
    
    
    54
    
    
    President, Western Region, of Centex Real
Estate Corporation (since April 2007);
Co-President and Co-Chief Operating Officer
(West Operating Region) of Centex Real Estate
Corporation from March 2006 to April 2007;
Executive Vice President  West Coast Region
of Centex Real Estate Corporation from May
2002 to March 2006; President  Northern
California Division of Centex Real Estate
Corporation from June 1996 to May 2002Joseph A. Bosch
    
    
    49
    
    
    Senior Vice President  Human Resources since
July 2006; Senior Vice President  Human
Resources at Tenet Healthcare Corporation
from August 2004 to June 2006; Chief People
Officer at Pizza Hut, a unit of YUM! Brands,
Inc. from June 1997 to July 2004Timothy R. Eller
    
    
    58
    
    
    Chairman of the Board, Chief Executive
Officer, President and Chief Operating
Officer of Centex Corporation (Chairman of
the Board and Chief Executive Officer since
April 2004; President and Chief Operating
Officer since April 2002); Executive Vice
President of Centex Corporation from August
1998 to April 2002; Chairman of the Board of
Centex Real Estate Corporation from April
1998 to April 2003, and since April 2006;
Chief Executive Officer of Centex Real Estate
Corporation from July 1991 to April 2002, and
since April 2006; President and Chief
Operating Officer of Centex Real Estate
Corporation from January 1990 to May 1996Mark D. Kemp
    
    
    45
    
    
    Senior Vice President and Controller of
Centex Corporation since September 2004;
interim Chief Financial Officer from June
2006 to October 2006; Vice President and
Controller of Centex Corporation from
December 2002 to September 2004; Partner and
employee at Arthur Andersen LLP from December
1983 to August 2002Catherine R. Smith
    
    
    43
    
    
    Executive Vice President and Chief Financial
Officer of Centex Corporation since October
2006; Executive Vice President and Chief
Financial Officer of Kennametal, Inc. from
April 2005 to October 2006; Executive Vice
President and Chief Financial Officer of Bell
Systems, a business segment of Textron, Inc.,
from October 2003 to April 2005; various
financial positions including Vice President
and Chief Financial Officer of the
Intelligence and Information Systems business
segment of Raytheon Company from August 1986
to September 2003Robert S. Stewart
    
    
    53
    
    
    Senior Vice President  Strategy and
Corporate Development of Centex Corporation
since April 2005; Senior Vice President 
Strategic Planning and Marketing from May
2000 to March 2005; Employee at the
Weyerhaeuser Company from March 1977 to May
2000, during which time he held a range of
key management positions, including positions
in strategic planningBrian J. Woram
    
    
    46
    
    
    Senior Vice President, Chief Legal Officer,
General Counsel and Assistant Secretary of
Centex Corporation (Secretary from December
2004 to March 2005); Senior Vice President,
General Counsel and Assistant Secretary of
Centex Real Estate Corporation from September
1998 to December 2004
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PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER REPURCHASES OF EQUITY SECURITIES
 Stock Prices and Dividends
 Year Ended March 31, 2007
    
    Year Ended March 31, 2006Price
    
    
    
    
    
    PriceHigh
    
    Low
    
    Dividends
    
    High
    
    Low
    
    DividendsQuarterFirst
    
    $
    64.62
    
    
    $
    44.13
    
    
    $
    .04
    
    
    $
    73.11
    
    
    $
    55.10
    
    
    $
    .04Second
    
    $
    55.70
    
    
    $
    42.90
    
    
    $
    .04
    
    
    $
    79.66
    
    
    $
    61.58
    
    
    $
    .04Third
    
    $
    58.42
    
    
    $
    48.34
    
    
    $
    .04
    
    
    $
    76.44
    
    
    $
    58.13
    
    
    $
    .04Fourth
    
    $
    56.45
    
    
    $
    40.41
    
    
    $
    .04
    
    
    $
    79.40
    
    
    $
    61.40
    
    
    $
    .04
 The principal market for our common stock is the New York Stock Exchange (ticker symbol CTX).
The approximate number of record holders of our common stock at May 9, 2007 was 2,996.
 The remaining information called for by this item relating to securities authorized for issuance
under equity compensation plans is reported in Note (K), Capital Stock and Employee Benefit
Plans, of the Notes to Consolidated Financial Statements.
 Share Repurchases
  Issuer Purchases of Equity SecuritiesTotal Number of
    
    Maximum Number ofShares Purchased
    
    Shares that May YetTotal Number of
    
    Average Price
    
    as Part of Publicly
    
    Be Purchased UnderShares Purchased
    
    Paid Per Share
    
    Announced Plan
    
    the PlanPeriodJanuary 1-31
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    9,399,700February 1-28
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    9,399,700March 1-31
    
    
    10,311
    
    
    $
    41.78
    
    
    
    
    
    
    
    9,399,700Total (1)
    
    
    10,311
    
    
    $
    41.78
    
    
    
    
 
 (1)
    
    The 10,311 shares repurchased for the quarter ended March 31, 2007 represent the delivery
to the Company by employees or directors of previously issued shares to satisfy the exercise
price of options and/or withholding taxes that arise on the exercise of options or the vesting
of restricted stock. These transactions are authorized under the terms of the equity plans
under which the options or other equity were awarded; however, these transactions are not
considered repurchases pursuant to the Companys share repurchase program.  Performance Graph
   18




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2002
    
    2003
    
    2004
    
    2005
    
    2006
    
    2007Centex Corporation
    
    $
    100
    
    
    $
    105
    
    
    $
    223
    
    
    $
    237
    
    
    $
    257
    
    
    $
    174S&P500 Index
    
    $
    100
    
    
    $
    75
    
    
    $
    102
    
    
    $
    108
    
    
    $
    121
    
    
    $
    136S&P HB Index
    
    $
    100
    
    
    $
    105
    
    
    $
    224
    
    
    $
    281
    
    
    $
    309
    
    
    $
    212
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ITEM 6. SELECTED FINANCIAL DATA
 Summary of Selected Financial Data (Unaudited) (1)   (Dollars in thousands, except per share data)
 For the Years Ended March 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Revenues
    
    $
    12,014,567
    
    
    $
    12,851,864
    
    
    $
    9,934,282
    
    
    $
    8,159,819
    
    
    $
    6,509,763Earnings (Loss) from Continuing Operations
(2)
    
    $
    (11,780
    )
    
    $
    1,207,089
    
    
    $
    885,808
    
    
    $
    693,871
    
    
    $
    462,296Net Earnings
    
    $
    268,366
    
    
    $
    1,289,313
    
    
    $
    1,011,364
    
    
    $
    827,686
    
    
    $
    555,919Stockholders Equity
    
    $
    5,112,269
    
    
    $
    5,011,658
    
    
    $
    4,280,757
    
    
    $
    3,050,225
    
    
    $
    2,657,846Net Earnings as a Percentage of Average
Stockholders Equity
    
    
    5.3
    %
    
    
    27.8
    %
    
    
    27.6
    %
    
    
    29.0
    %
    
    
    23.3
    %Total Assets
    
    $
    13,205,759
    
    
    $
    21,364,999
    
    
    $
    20,011,079
    
    
    $
    16,077,260
    
    
    $
    11,639,707Deferred Income Tax Assets
    
    $
    489,814
    
    
    $
    237,021
    
    
    $
    187,427
    
    
    $
    103,920
    
    
    $
    124,151Total Long-term Debt, Consolidated
    
    $
    3,962,618
    
    
    $
    3,915,027
    
    
    $
    3,160,047
    
    
    $
    2,456,749
    
    
    $
    2,024,953Debt (with Financial Services reflected on the equity
method) (3)
    
    $
    3,904,425
    
    
    $
    3,982,193
    
    
    $
    3,107,917
    
    
    $
    2,317,749
    
    
    $
    2,024,953Financial Services Debt
    
    
    1,663,040
    
    
    
    2,077,215
    
    
    
    1,695,855
    
    
    
    1,676,718
    
    
    
    204,147Total Debt, Consolidated
    
    $
    5,567,465
    
    
    $
    6,059,408
    
    
    $
    4,803,772
    
    
    $
    3,994,467
    
    
    $
    2,229,100Capitalization (with Financial Services
reflected on the equity method and excluding lot
option minority interest) (3) (4)
    
    $
    9,039,760
    
    
    $
    9,031,515
    
    
    $
    7,429,058
    
    
    $
    5,369,255
    
    
    $
    4,683,107Financial Services Capitalization (4)
    
    
    1,825,467
    
    
    
    2,742,764
    
    
    
    2,314,465
    
    
    
    2,194,533
    
    
    
    585,554Lot Option Minority Interest (4)
    
    
    152,936
    
    
    
    492,096
    
    
    
    415,413
    
    
    
    332,668
    
    
    
    Consolidating Eliminations
    
    
    (161,492
    )
    
    
    (664,376
    )
    
    
    (617,248
    )
    
    
    (516,280
    )
    
    
    (379,671
    )Total Capitalization, Consolidated
    
    $
    10,856,671
    
    
    $
    11,601,999
    
    
    $
    9,541,688
    
    
    $
    7,380,176
    
    
    $
    4,888,990Debt as a Percentage of Capitalization (4)
With Financial Services reflected on the equity
method and excluding lot option minority interest
(3)
    
    
    43.2
    %
    
    
    44.1
    %
    
    
    41.8
    %
    
    
    43.2
    %
    
    
    43.2
    %Consolidated
    
    
    51.3
    %
    
    
    52.2
    %
    
    
    50.3
    %
    
    
    54.1
    %
    
    
    45.6
    %Per Common Share
Earnings (Loss) from Continuing Operations
Per Share  Basic (2)
    
    $
    (0.10
    )
    
    $
    9.51
    
    
    $
    7.08
    
    
    $
    5.63
    
    
    $
    3.80Earnings (Loss) from Continuing Operations
Per Share  Diluted (2)
    
    $
    (0.10
    )
    
    $
    9.09
    
    
    $
    6.69
    
    
    $
    5.36
    
    
    $
    3.67Net Earnings Per Share  Basic
    
    $
    2.23
    
    
    $
    10.16
    
    
    $
    8.08
    
    
    $
    6.71
    
    
    $
    4.57Net Earnings Per Share  Diluted
    
    $
    2.23
    
    
    $
    9.71
    
    
    $
    7.64
    
    
    $
    6.40
    
    
    $
    4.41Cash Dividends
    
    $
    0.16
    
    
    $
    0.16
    
    
    $
    0.16
    
    
    $
    0.10
    
    
    $
    0.08Book Value Based on Shares Outstanding at Year End
    
    $
    42.61
    
    
    $
    41.04
    
    
    $
    33.51
    
    
    $
    24.87
    
    
    $
    21.84Average Shares OutstandingBasic
    
    
    120,537,235
    
    
    
    126,870,887
    
    
    
    125,226,596
    
    
    
    123,382,068
    
    
    
    121,564,084Diluted
    
    
    120,537,235
    
    
    
    132,749,797
    
    
    
    132,397,961
    
    
    
    129,392,821
    
    
    
    126,116,312Stock PricesHigh
    
    $
    64.62
    
    
    $
    79.66
    
    
    $
    66.14
    
    
    $
    58.40
    
    
    $
    29.60Low
    
    $
    40.41
    
    
    $
    55.10
    
    
    $
    39.94
    
    
    $
    26.78
    
    
    $
    19.16
 
 (1)
    
    The selected financial data presented in this table, excluding stock prices for the periods
covered by the financial statements included in this Report and all prior periods, have been
derived from our audited financial statements and adjusted to reflect Construction Services
(sold in March 2007), Home Equity (sold in July 2006), International Homebuilding (sold in
September 2005), Construction Products (spun off in January 2004) and Manufactured Homes (spun
off in June 2003) as discontinued operations.(2)
    
    Earnings (Loss) from Continuing Operations are Before Cumulative Effect of a Change in
Accounting Principle adopted in fiscal year 2004 associated with the initial consolidation of
HSF-I pursuant to the provisions of FIN 46.(3)
    
    Represents a supplemental presentation that reflects the Financial Services segment as if
accounted for under the equity method. We believe that separate disclosure of the
consolidating information is useful because the Financial Services subsidiaries and related
companies operate in a distinctly different financial environment that generally requires
significantly less equity to support their higher debt levels compared to the operations of
our other subsidiaries; the Financial Services subsidiaries and related companies have
structured their financing programs substantially on a stand alone basis; and we have limited
obligations with respect to the indebtedness of our Financial Services subsidiaries and
related companies. Management uses this information in its financial and strategic planning.
We also use this presentation to allow investors to compare us to homebuilders that do not
have financial services operations.(4)
    
    Capitalization is composed of Debt, Minority Interest and Stockholders Equity. In the
calculation of Capitalization, minority interest in fiscal years 2007, 2006, 2005 and 2004
excludes $152.9 million, $492.1 million, $415.4 million and $332.7 million, respectively, of
minority interests recorded in connection with the consolidation of certain entities with
which Home Building has lot option agreements. This supplemental presentation is used by
management in its financial and strategic planning and allows investors to compare us to other
homebuilders, which may not have similar arrangements. 20




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##### Table of Contents



ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Executive Summary
  For the Years Ended March 31,2007
    
    
    2006
    
    
    2005Revenues
    
    $
    12,014,567
    
    
    $
    12,851,864
    
    
    $
    9,934,282Earnings (Loss) from Continuing Operations
    
    $
    (11,780
    )
    
    $
    1,207,089
    
    
    $
    885,808Earnings from Discontinued Operations
    
    
    280,146
    
    
    
    82,224
    
    
    
    125,556Net Earnings
    
    $
    268,366
    
    
    $
    1,289,313
    
    
    $
    1,011,364
   
    
    a decline in homebuyer demand due to lower consumer confidence in the consumer real
estate market and a decrease in the affordability of housing in selected markets,
    
    increased inventory of new and existing homes for sale, and
    
    pricing pressures resulting from the imbalance between supply and demand.
   
    
    a $857.4 million decrease in homebuilding revenues, net of discounts,
    
    a $324.8 million increase in write-offs of land deposits and pre-acquisition costs,
    
    $323.9 million in impairments to land under development, and
    
    $124.5 million in our share of joint ventures impairments and our decision to exit one joint venture .
  21




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##### Table of Contents




    
    an increase in the percentage of mortgage loans provided to Home
Buildings customers from 75% to 80%,
    
    while the total number of originated mortgage loans decreased, primarily
as a result of a decrease in Retail mortgage loans originated, the average originated
mortgage loan size increased,
    
    average income per loan from the sale of mortgage servicing rights increased, and
    
    selling, general and administrative expenses were reduced.
       22




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##### Table of Contents



FISCAL YEAR 2007 COMPARED TO FISCAL YEAR 2006
 HOME BUILDING
     For the Years Ended March 31,2007
    
    
    2006Change
    
    
    
    
    
    
    ChangeRevenues  Housing
    
    $
    11,014,975
    
    
    
    (7.6
    %)
    
    $
    11,920,634
    
    
    
    32.3
    %Revenues  Land Sales and Other
    
    
    399,852
    
    
    
    13.7
    %
    
    
    351,569
    
    
    
    (0.3
    %)Cost of Sales  Housing
    
    
    (8,599,465
    )
    
    
    1.7
    %
    
    
    (8,458,995
    )
    
    
    30.4
    %Cost of Sales  Land Sales and Other
    
    
    (1,044,455
    )
    
    
    251.7
    %
    
    
    (296,938
    )
    
    
    13.6
    %Selling, General and Administrative Expenses
    
    
    (1,523,001
    )
    
    
    0.4
    %
    
    
    (1,517,439
    )
    
    
    33.7
    %Earnings (Loss) from Unconsolidated Entities
and Other (1)
    
    
    (42,553
    )
    
    
    (149.5
    %)
    
    
    85,998
    
    
    
    25.0
    %Operating Earnings (2)
    
    $
    205,353
    
    
    
    (90.2
    %)
    
    $
    2,084,829
    
    
    
    34.9
    %Operating Earnings as a Percentage of Revenues:Housing Operations (3)
    
    
    8.1
    %
    
    
    (8.2
    )
    
    
    16.3
    %
    
    
    0.9Total Homebuilding Operations
    
    
    1.8
    %
    
    
    (15.2
    )
    
    
    17.0
    %
    
    
    0.5
 
 (1)
    
    Earnings (Loss) from Unconsolidated Entities and Other includes our share of joint
ventures impairments and our decision to exit one joint venture.(2)
    
    Operating earnings represent Home Buildings earnings exclusive of certain
corporate general and administrative expenses.(3)
    
    Operating earnings from housing operations is a non-GAAP financial measure,
which we believe is useful to investors for the reasons described in our previous
reports filed with the SEC, including our Current Report on Form 8-K filed on January
23, 2007. Operating earnings from housing operations is equal to Housing Revenues less
Housing Cost of Sales and Selling, General and Administrative Expenses, all of which
are set forth in the tables above. 23




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##### Table of Contents



For the Years Ended March 31,2007
    
    
    2006Change
    
    
    
    
    
    
    ChangeUnits ClosedEast
    
    
    6,720
    
    
    
    (5.6
    %)
    
    
    7,116
    
    
    
    25.4
    %Southeast
    
    
    5,374
    
    
    
    (16.4
    %)
    
    
    6,426
    
    
    
    32.0
    %Central
    
    
    4,789
    
    
    
    (19.8
    %)
    
    
    5,971
    
    
    
    6.8
    %Texas
    
    
    7,083
    
    
    
    2.7
    %
    
    
    6,899
    
    
    
    11.8
    %Northwest
    
    
    4,709
    
    
    
    2.8
    %
    
    
    4,580
    
    
    
    22.5
    %Southwest
    
    
    6,209
    
    
    
    (8.5
    %)
    
    
    6,786
    
    
    
    20.9
    %Other homebuilding
    
    
    901
    
    
    
    (38.0
    %)
    
    
    1,454
    
    
    
    (15.8
    %)35,785
    
    
    
    (8.8
    %)
    
    
    39,232
    
    
    
    17.5
    %Average Revenue Per UnitEast
    
    $
    324,286
    
    
    
    (4.3
    %)
    
    $
    338,778
    
    
    
    14.5
    %Southeast
    
    $
    300,105
    
    
    
    3.4
    %
    
    $
    290,275
    
    
    
    11.2
    %Central
    
    $
    216,737
    
    
    
    (0.4
    %)
    
    $
    217,665
    
    
    
    1.1
    %Texas
    
    $
    158,775
    
    
    
    6.2
    %
    
    $
    149,452
    
    
    
    5.9
    %Northwest
    
    $
    444,113
    
    
    
    (4.3
    %)
    
    $
    463,931
    
    
    
    15.4
    %Southwest
    
    $
    424,323
    
    
    
    1.9
    %
    
    $
    416,274
    
    
    
    9.5
    %Other homebuilding
    
    $
    371,255
    
    
    
    48.2
    %
    
    $
    250,486
    
    
    
    26.3
    %Total Home Building
    
    $
    307,810
    
    
    
    1.3
    %
    
    $
    303,850
    
    
    
    12.6
    %
 Revenues
    For the Years Ended March 31,2007
    
    2006Change
    
    
    
    
    
    ChangeAverage
Operating
Neighborhoods
(1)
    
    
    687
    
    
    
    9.7
    %
    
    
    626
    
    
    
    6.3
    %Closings
Per Average
Neighborhood
    
    
    52.1
    
    
    
    (16.9
    %)
    
    
    62.7
    
    
    
    10.6
    %
 
 (1)
    
    We define a neighborhood as an individual active selling location targeted to a
specific buyer segment with greater than ten homes remaining to be sold .  24




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##### Table of Contents



Operating Margins
    For the Years Ended March 31,2007
    
    
    2006Impairments
    
    
    Write-offs
    
    
    Impairments
    
    
    Write-offsEast
    
    $
    63,023
    
    
    $
    58,886
    
    
    $
    
    
    
    $
    7,217Southeast
    
    
    51,321
    
    
    
    30,286
    
    
    
    
    
    
    
    3,544Central
    
    
    30,440
    
    
    
    39,105
    
    
    
    
    
    
    
    5,190Texas
    
    
    3,502
    
    
    
    522
    
    
    
    
    
    
    
    506Northwest
    
    
    61,119
    
    
    
    66,845
    
    
    
    
    
    
    
    8,175Southwest
    
    
    104,296
    
    
    
    162,165
    
    
    
    
    
    
    
    9,627Other homebuilding
    
    
    10,212
    
    
    
    2,190
    
    
    
    
    
    
    
    896$
    323,913
    
    
    $
    359,999
    
    
    $
    
    
    
    $
    35,155
  25




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##### Table of Contents



For the Years Ended March 31,2007
    
    
    2006Change
    
    
    
    
    
    
    ChangeCompensation and Benefits
    
    $
    630,587
    
    
    
    (11.6
    %)
    
    $
    713,514
    
    
    
    29.2
    %Sales Commissions
    
    
    464,469
    
    
    
    6.7
    %
    
    
    435,413
    
    
    
    33.4
    %Advertising and Marketing
    
    
    199,488
    
    
    
    18.6
    %
    
    
    168,156
    
    
    
    34.6
    %Other
    
    
    228,457
    
    
    
    14.0
    %
    
    
    200,356
    
    
    
    52.1
    %Selling, General and Administrative Expenses
    
    $
    1,523,001
    
    
    
    0.4
    %
    
    $
    1,517,439
    
    
    
    33.7
    %SG&A as a Percentage of Revenues
    
    
    13.3
    %
    
    
    0.9
    
    
    
    12.4
    %
    
    
    0.3
 Sales Orders, Backlog Units and Land Holdings
  For the Years Ended March 31,2007
    
    2006Change
    
    
    
    
    
    ChangeSales Orders (in Units)East
    
    
    5,495
    
    
    
    (19.7
    %)
    
    
    6,840
    
    
    
    6.4
    %Southeast
    
    
    3,425
    
    
    
    (39.9
    %)
    
    
    5,703
    
    
    
    (6.9
    %)Central
    
    
    4,271
    
    
    
    (24.2
    %)
    
    
    5,636
    
    
    
    5.4
    %Texas
    
    
    6,914
    
    
    
    (1.1
    %)
    
    
    6,994
    
    
    
    7.5
    %Northwest
    
    
    4,300
    
    
    
    (6.5
    %)
    
    
    4,597
    
    
    
    9.2
    %Southwest
    
    
    4,539
    
    
    
    (36.9
    %)
    
    
    7,196
    
    
    
    17.3
    %Other homebuilding
    
    
    105
    
    
    
    (90.1
    %)
    
    
    1,064
    
    
    
    (41.0
    %)29,049
    
    
    
    (23.6
    %)
    
    
    38,030
    
    
    
    4.0
    %Sales Per Average Neighborhood
    
    
    42.3
    
    
    
    (30.4
    %)
    
    
    60.8
    
    
    
    (2.1
    %)
 As of March 31,2007
    
    2006Change
    
    
    
    
    
    ChangeBacklog UnitsEast
    
    
    1,848
    
    
    
    (39.9
    %)
    
    
    3,073
    
    
    
    (8.2
    %)Southeast
    
    
    1,519
    
    
    
    (56.2
    %)
    
    
    3,468
    
    
    
    (17.3
    %)Central
    
    
    1,744
    
    
    
    (22.9
    %)
    
    
    2,262
    
    
    
    (12.9
    %)Texas
    
    
    2,020
    
    
    
    (7.7
    %)
    
    
    2,189
    
    
    
    4.5
    %Northwest
    
    
    1,805
    
    
    
    (18.5
    %)
    
    
    2,214
    
    
    
    0.8
    %Southwest
    
    
    1,503
    
    
    
    (52.6
    %)
    
    
    3,173
    
    
    
    14.8
    %Other homebuilding
    
    
    212
    
    
    
    (79.0
    %)
    
    
    1,008
    
    
    
    (27.9
    %)10,651
    
    
    
    (38.7
    %)
    
    
    17,387
    
    
    
    (6.5
    %)
   26




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##### Table of Contents



As of March 31,2007
    
    2006LotsLots Owned
    
    Lots Controlled
    
    Total Lots
    
    Owned
    
    Lots Controlled
    
    Total LotsEast
    
    
    18,604
    
    
    
    25,829
    
    
    
    44,433
    
    
    
    20,036
    
    
    
    49,421
    
    
    
    69,457Southeast
    
    
    25,485
    
    
    
    7,113
    
    
    
    32,598
    
    
    
    26,570
    
    
    
    38,227
    
    
    
    64,797Central
    
    
    8,851
    
    
    
    5,303
    
    
    
    14,154
    
    
    
    10,793
    
    
    
    15,994
    
    
    
    26,787Texas
    
    
    16,113
    
    
    
    10,405
    
    
    
    26,518
    
    
    
    18,823
    
    
    
    12,774
    
    
    
    31,597Northwest
    
    
    10,388
    
    
    
    6,224
    
    
    
    16,612
    
    
    
    11,286
    
    
    
    28,451
    
    
    
    39,737Southwest
    
    
    14,694
    
    
    
    6,755
    
    
    
    21,449
    
    
    
    17,986
    
    
    
    38,827
    
    
    
    56,813Other homebuilding
    
    
    4,176
    
    
    
    80
    
    
    
    4,256
    
    
    
    3,334
    
    
    
    3,199
    
    
    
    6,53398,311
    
    
    
    61,709
    
    
    
    160,020
    
    
    
    108,828
    
    
    
    186,893
    
    
    
    295,721Change
    
    
    (9.7
    %)
    
    
    (67.0
    %)
    
    
    (45.9
    %)
    
    
    12.3
    %
    
    
    11.0
    %
    
    
    11.5
    %
  27




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##### Table of Contents



Regional Discussion
  For the Years Ended March 31,2007
    
    
    2006Change
    
    
    
    
    
    
    ChangeRevenuesEast
    
    $
    2,255,702
    
    
    
    (7.7
    %)
    
    $
    2,444,433
    
    
    
    38.3
    %Southeast
    
    
    1,686,003
    
    
    
    (15.0
    %)
    
    
    1,983,837
    
    
    
    45.9
    %Central
    
    
    1,048,883
    
    
    
    (19.9
    %)
    
    
    1,310,039
    
    
    
    7.3
    %Texas
    
    
    1,154,702
    
    
    
    8.6
    %
    
    
    1,063,379
    
    
    
    21.2
    %Northwest
    
    
    2,121,669
    
    
    
    (1.0
    %)
    
    
    2,143,852
    
    
    
    40.2
    %Southwest
    
    
    2,730,392
    
    
    
    (3.9
    %)
    
    
    2,841,081
    
    
    
    28.7
    %Other homebuilding
    
    
    417,476
    
    
    
    (14.0
    %)
    
    
    485,582
    
    
    
    22.0
    %$
    11,414,827
    
    
    
    (7.0
    %)
    
    $
    12,272,203
    
    
    
    31.1
    %Operating Earnings (Loss)East
    
    $
    151,821
    
    
    
    (66.2
    %)
    
    $
    449,587
    
    
    
    45.2
    %Southeast
    
    
    108,902
    
    
    
    (70.9
    %)
    
    
    373,908
    
    
    
    71.6
    %Central
    
    
    (54,231
    )
    
    
    (162.0
    %)
    
    
    87,477
    
    
    
    (30.9
    %)Texas
    
    
    93,209
    
    
    
    9.3
    %
    
    
    85,284
    
    
    
    23.6
    %Northwest
    
    
    112,824
    
    
    
    (77.3
    %)
    
    
    496,764
    
    
    
    46.1
    %Southwest
    
    
    (179,995
    )
    
    
    (134.5
    %)
    
    
    521,324
    
    
    
    18.5
    %Other homebuilding
    
    
    (27,177
    )
    
    
    (138.6
    %)
    
    
    70,485
    
    
    
    67.2
    %$
    205,353
    
    
    
    (90.2
    %)
    
    $
    2,084,829
    
    
    
    34.9
    %
 East
   Southeast
   28




---



##### Table of Contents



Central
   Texas
   Northwest
   Southwest
   29




---



##### Table of Contents



Other homebuilding
    FINANCIAL SERVICES
     30




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##### Table of Contents



For the Years Ended March 31,2007
    
    
    2006Change
    
    
    
    
    
    
    ChangeRevenues
    
    $
    468,001
    
    
    
    1.3
    %
    
    $
    462,223
    
    
    
    9.6
    %Cost of Sales
    
    
    (90,328
    )
    
    
    37.1
    %
    
    
    (65,904
    )
    
    
    105.0
    %Selling, General and Administrative Expenses
    
    
    (293,143
    )
    
    
    (6.0
    %)
    
    
    (311,854
    )
    
    
    6.2
    %Operating Earnings
    
    $
    84,530
    
    
    
    0.1
    %
    
    $
    84,465
    
    
    
    (12.0
    %)Operating Margin
    
    
    18.1
    %
    
    
    (0.2
    )
    
    
    18.3
    %
    
    
    (4.5
    )Interest Margin
    
    $
    31,478
    
    
    
    (17.6
    %)
    
    $
    38,201
    
    
    
    (22.9
    %)Average Interest Earning Assets
    
    $
    1,612,851
    
    
    
    2.4
    %
    
    $
    1,574,856
    
    
    
    12.8
    %Average Yield
    
    
    7.55
    %
    
    
    0.94
    
    
    
    6.61
    %
    
    
    0.76Average Interest Bearing Liabilities
    
    $
    1,571,509
    
    
    
    (0.2
    %)
    
    $
    1,574,235
    
    
    
    15.4
    %Average Rate Paid
    
    
    5.79
    %
    
    
    1.61
    
    
    
    4.18
    %
    
    
    1.84
   For the Years Ended March 31,2007
    
    2006Change
    
    
    
    
    
    ChangeLoan Sales to InvestorsVolume (in millions)
    
    $
    10,766.4
    
    
    
    (9.1
    %)
    
    $
    11,845.5
    
    
    
    27.0
    %Number of Loans Sold
    
    
    51,170
    
    
    
    (17.4
    %)
    
    
    61,961
    
    
    
    17.1
    %Gain on Sale of Mortgage Loans
    
    $
    164,995
    
    
    
    0.1
    %
    
    $
    164,804
    
    
    
    16.3
    %Loans Brokered to Third Party LendersVolume (in millions)
    
    $
    3,353.8
    
    
    
    (6.0
    %)
    
    $
    3,566.3
    
    
    
    11.1
    %Number of Brokered Loans
    
    
    11,005
    
    
    
    (14.5
    %)
    
    
    12,867
    
    
    
    (3.5
    %)Broker Fees
    
    $
    65,663
    
    
    
    (4.8
    %)
    
    $
    69,005
    
    
    
    (3.7
    %)Average Loan SizeLoans Sold to Investors
    
    $
    210,407
    
    
    
    10.1
    %
    
    $
    191,178
    
    
    
    8.5
    %Loans Brokered to Third Party Lenders
    
    $
    304,767
    
    
    
    10.0
    %
    
    $
    277,166
    
    
    
    15.1
    %
  31




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##### Table of Contents



For the Years Ended March 31,2007
    
    2006Change
    
    
    
    
    
    ChangeOpen Applications  Beginning
    
    
    23,219
    
    
    
    (6.8
    %)
    
    
    24,912
    
    
    
    (7.1
    %)New Applications
    
    
    95,868
    
    
    
    (14.4
    %)
    
    
    112,033
    
    
    
    3.8
    %Cancelled Applications
    
    
    (43,660
    )
    
    
    1.4
    %
    
    
    (43,043
    )
    
    
    1.2
    %Originated Loans
    
    
    (57,779
    )
    
    
    (18.3
    %)
    
    
    (70,683
    )
    
    
    5.0
    %Open Applications  Ending
    
    
    17,648
    
    
    
    (24.0
    %)
    
    
    23,219
    
    
    
    (6.8
    %)
  For the Years Ended March 31,2007
    
    
    2006Change
    
    
    
    
    
    
    ChangeOrigination Volume (in millions)
    
    $
    13,826.0
    
    
    
    (12.6
    %)
    
    $
    15,827.4
    
    
    
    21.4
    %Number of Originated LoansBuilder
    
    
    27,141
    
    
    
    (0.8
    %)
    
    
    27,364
    
    
    
    21.5
    %Retail
    
    
    30,638
    
    
    
    (29.3
    %)
    
    
    43,319
    
    
    
    (3.3
    %)57,779
    
    
    
    (18.3
    %)
    
    
    70,683
    
    
    
    5.0
    %Average Loan Size  Originated Loans
    
    $
    239,740
    
    
    
    7.1
    %
    
    $
    223,900
    
    
    
    15.7
    %
   OTHER
  32




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##### Table of Contents



For the Years Ended March 31,2007
    
    
    2006Change
    
    
    
    
    
    
    ChangeOperating Loss from Home Services
Operations
    
    $
    (4,013
    )
    
    
    (46.5
    %)
    
    $
    (7,498
    )
    
    
    (52.7
    %)Operating Earnings from Investment
Real Estate Operations
    
    
    2,488
    
    
    
    44.7
    %
    
    
    1,719
    
    
    
    (92.0
    %)Corporate General and Administrative
Expenses
    
    
    (185,585
    )
    
    
    (33.5
    %)
    
    
    (279,172
    )
    
    
    12.0
    %Interest Expense
    
    
    
    
    
    
    (100.0
    %)
    
    
    (12,067
    )
    
    
    (37.6
    %)Operating Loss
    
    $
    (187,110
    )
    
    
    (37.0
    %)
    
    $
    (297,018
    )
    
    
    12.9
    %
   For the Years Ended March 31,2007
    
    
    2006Change
    
    
    
    
    
    
    ChangeCompensation and Benefits
    
    $
    138,132
    
    
    
    (37.1
    %)
    
    $
    219,556
    
    
    
    8.9
    %Professional Services
    
    
    20,170
    
    
    
    (18.0
    %)
    
    
    24,593
    
    
    
    74.4
    %Rent and Utilities
    
    
    6,795
    
    
    
    (0.9
    %)
    
    
    6,854
    
    
    
    37.4
    %Travel
    
    
    6,828
    
    
    
    (30.3
    %)
    
    
    9,795
    
    
    
    16.7
    %Other
    
    
    13,660
    
    
    
    (25.7
    %)
    
    
    18,374
    
    
    
    (9.1
    %)General and Administrative Expenses
    
    $
    185,585
    
    
    
    (33.5
    %)
    
    $
    279,172
    
    
    
    12.0
    %
     33




---



##### Table of Contents



DISCONTINUED OPERATIONS
    Home Equity
  For the Years Ended March 31,2007(1)
    
    2006 (1)Revenues
    
    $
    171,170
    
    
    $
    834,526Operating (Loss) Earnings
    
    $
    (42,691
    )
    
    $
    118,198Pre-tax Gain on Sale
    
    $
    125,365
    
    
    $
    
 
 (1)
    
    Amounts include the elimination of intercompany activity
related to sales from CTX Mortgage
Company, LLC to Home Equity. Intercompany revenues and costs and
expenses of $3,362 thousand and ($126) thousand, respectively,
were eliminated. Construction Services
  For the Years Ended March 31,2007(1)
    
    2006 (1)Change
    
    
    
    
    
    ChangeRevenues
    
    $
    2,108,620
    
    
    
    36.2
    %
    
    $
    1,547,805
    
    
    
    (11.0
    %)Operating Earnings
    
    $
    27,062
    
    
    
    16.6
    %
    
    $
    23,217
    
    
    
    (1.3
    %)Pre-tax Gain on Sale
    
    $
    344,752
    
    
    
    100.0
    %
    
    $
    
    
    
    
    
 
 (1)
    
    Amounts include the elimination of intersegment activity
related to Construction
Services multi-unit residential vertical construction for Home
Building. Intercompany revenues and costs and expenses of $58,804
thousand and $55,183 thousand, respectively, were eliminated.  34




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##### Table of Contents



FISCAL YEAR 2006 COMPARED TO FISCAL YEAR 2005
 HOME BUILDING
  For the Years Ended March 31,2006
    
    
    2005Change
    
    
    
    
    
    
    ChangeRevenues  Housing
    
    $
    11,920,634
    
    
    
    32.3
    %
    
    $
    9,007,148
    
    
    
    22.4
    %Revenues  Land Sales and Other
    
    
    351,569
    
    
    
    (0.3
    %)
    
    
    352,593
    
    
    
    122.7
    %Cost of Sales  Housing
    
    
    (8,458,995
    )
    
    
    30.4
    %
    
    
    (6,486,709
    )
    
    
    20.1
    %Cost of Sales  Land Sales and Other
    
    
    (296,938
    )
    
    
    13.6
    %
    
    
    (261,394
    )
    
    
    82.5
    %Selling, General and Administrative Expenses
    
    
    (1,517,439
    )
    
    
    33.7
    %
    
    
    (1,135,123
    )
    
    
    24.1
    %Earnings from Unconsolidated Entities and Other
    
    
    85,998
    
    
    
    25.0
    %
    
    
    68,786
    
    
    
    129.7
    %Operating Earnings
    
    $
    2,084,829
    
    
    
    34.9
    %
    
    $
    1,545,301
    
    
    
    41.8
    %Operating Earnings as a Percentage of Revenues:Housing Operations
    
    
    16.3
    %
    
    
    0.9
    
    
    
    15.4
    %
    
    
    1.2Total Homebuilding Operations
    
    
    17.0
    %
    
    
    0.5
    
    
    
    16.5
    %
    
    
    2.0
 For the Years Ended March 31,2006
    
    
    2005Change
    
    
    
    
    
    
    ChangeUnits ClosedEast
    
    
    7,116
    
    
    
    25.4
    %
    
    
    5,674
    
    
    
    12.0
    %Southeast
    
    
    6,426
    
    
    
    32.0
    %
    
    
    4,867
    
    
    
    5.9
    %Central
    
    
    5,971
    
    
    
    6.8
    %
    
    
    5,593
    
    
    
    12.1
    %Texas
    
    
    6,899
    
    
    
    11.8
    %
    
    
    6,173
    
    
    
    1.9
    %Northwest
    
    
    4,580
    
    
    
    22.5
    %
    
    
    3,740
    
    
    
    19.8
    %Southwest
    
    
    6,786
    
    
    
    20.9
    %
    
    
    5,614
    
    
    
    12.7
    %Other homebuilding
    
    
    1,454
    
    
    
    (15.8
    %)
    
    
    1,726
    
    
    
    11.1
    %39,232
    
    
    
    17.5
    %
    
    
    33,387
    
    
    
    10.0
    %Average Revenue Per UnitEast
    
    $
    338,778
    
    
    
    14.5
    %
    
    $
    295,980
    
    
    
    5.9
    %Southeast
    
    $
    290,275
    
    
    
    11.2
    %
    
    $
    261,150
    
    
    
    8.4
    %Central
    
    $
    217,665
    
    
    
    1.1
    %
    
    $
    215,297
    
    
    
    0.4
    %Texas
    
    $
    149,452
    
    
    
    5.9
    %
    
    $
    141,167
    
    
    
    (0.7
    %)Northwest
    
    $
    463,931
    
    
    
    15.4
    %
    
    $
    402,201
    
    
    
    18.9
    %Southwest
    
    $
    416,274
    
    
    
    9.5
    %
    
    $
    380,252
    
    
    
    17.4
    %Other homebuilding
    
    $
    250,486
    
    
    
    26.3
    %
    
    $
    198,254
    
    
    
    28.6
    %Total Home Building
    
    $
    303,850
    
    
    
    12.6
    %
    
    $
    269,780
    
    
    
    11.3
    %
 35




---



##### Table of Contents



For the Years Ended March 31,2006
    
    2005Change
    
    
    
    
    
    ChangeAverage Operating Neighborhoods
    
    
    626
    
    
    
    6.3
    %
    
    
    589
    
    
    
    5.6
    %Closings Per Average
Neighborhood
    
    
    62.7
    
    
    
    10.6
    %
    
    
    56.7
    
    
    
    4.2
    %
       For the Years Ended March 31,2006
    
    2005Change
    
    
    
    
    
    ChangeSales Orders (in Units)East
    
    
    6,840
    
    
    
    6.4
    %
    
    
    6,431
    
    
    
    14.5
    %Southeast
    
    
    5,703
    
    
    
    (6.9
    %)
    
    
    6,125
    
    
    
    15.7
    %Central
    
    
    5,636
    
    
    
    5.4
    %
    
    
    5,346
    
    
    
    0.5
    %Texas
    
    
    6,994
    
    
    
    7.5
    %
    
    
    6,508
    
    
    
    4.1
    %Northwest
    
    
    4,597
    
    
    
    9.2
    %
    
    
    4,211
    
    
    
    16.1
    %Southwest
    
    
    7,196
    
    
    
    17.3
    %
    
    
    6,137
    
    
    
    7.8
    %Other homebuilding
    
    
    1,064
    
    
    
    (41.0
    %)
    
    
    1,804
    
    
    
    (6.1
    %)38,030
    
    
    
    4.0
    %
    
    
    36,562
    
    
    
    8.4
    %Sales Per Average Neighborhood
    
    
    60.8
    
    
    
    (2.1
    %)
    
    
    62.1
    
    
    
    2.8
    %
 36




---



##### Table of Contents



As of March 31,2006
    
    2005Change
    
    
    
    
    
    ChangeBacklog UnitsEast
    
    
    3,073
    
    
    
    (8.2
    %)
    
    
    3,349
    
    
    
    29.2
    %Southeast
    
    
    3,468
    
    
    
    (17.3
    %)
    
    
    4,191
    
    
    
    42.9
    %Central
    
    
    2,262
    
    
    
    (12.9
    %)
    
    
    2,597
    
    
    
    (8.7
    %)Texas
    
    
    2,189
    
    
    
    4.5
    %
    
    
    2,094
    
    
    
    19.0
    %Northwest
    
    
    2,214
    
    
    
    0.8
    %
    
    
    2,197
    
    
    
    27.3
    %Southwest
    
    
    3,173
    
    
    
    14.8
    %
    
    
    2,763
    
    
    
    23.3
    %Other homebuilding
    
    
    1,008
    
    
    
    (27.9
    %)
    
    
    1,398
    
    
    
    5.9
    %17,387
    
    
    
    (6.5
    %)
    
    
    18,589
    
    
    
    20.6
    %
   As of March 31,2006
    
    2005Lots
    
    Lots
    
    
    
    
    
    Lots
    
    LotsOwned
    
    Controlled
    
    Total Lots
    
    Owned
    
    Controlled
    
    Total LotsEast
    
    
    20,036
    
    
    
    49,421
    
    
    
    69,457
    
    
    
    15,828
    
    
    
    43,437
    
    
    
    59,265Southeast
    
    
    26,570
    
    
    
    38,227
    
    
    
    64,797
    
    
    
    19,201
    
    
    
    27,890
    
    
    
    47,091Central
    
    
    10,793
    
    
    
    15,994
    
    
    
    26,787
    
    
    
    9,520
    
    
    
    20,569
    
    
    
    30,089Texas
    
    
    18,823
    
    
    
    12,774
    
    
    
    31,597
    
    
    
    22,292
    
    
    
    17,617
    
    
    
    39,909Northwest
    
    
    11,286
    
    
    
    28,451
    
    
    
    39,737
    
    
    
    9,620
    
    
    
    23,215
    
    
    
    32,835Southwest
    
    
    17,986
    
    
    
    38,827
    
    
    
    56,813
    
    
    
    16,729
    
    
    
    28,531
    
    
    
    45,260Other homebuilding
    
    
    3,334
    
    
    
    3,199
    
    
    
    6,533
    
    
    
    3,755
    
    
    
    7,091
    
    
    
    10,846108,828
    
    
    
    186,893
    
    
    
    295,721
    
    
    
    96,945
    
    
    
    168,350
    
    
    
    265,295Change
    
    
    12.3
    %
    
    
    11.0
    %
    
    
    11.5
    %
    
    
    25.1
    %
    
    
    45.9
    %
    
    
    37.6
    %
  37




---



##### Table of Contents



For the Years Ended March 31,2006
    
    
    2005Change
    
    
    
    
    
    
    ChangeRevenuesEast
    
    $
    2,444,433
    
    
    
    38.3
    %
    
    $
    1,767,299
    
    
    
    23.4
    %Southeast
    
    
    1,983,837
    
    
    
    45.9
    %
    
    
    1,359,364
    
    
    
    19.1
    %Central
    
    
    1,310,039
    
    
    
    7.3
    %
    
    
    1,221,526
    
    
    
    13.3
    %Texas
    
    
    1,063,379
    
    
    
    21.2
    %
    
    
    877,270
    
    
    
    1.4
    %Northwest
    
    
    2,143,852
    
    
    
    40.2
    %
    
    
    1,529,474
    
    
    
    41.5
    %Southwest
    
    
    2,841,081
    
    
    
    28.7
    %
    
    
    2,206,688
    
    
    
    33.3
    %Other homebuilding
    
    
    485,582
    
    
    
    22.0
    %
    
    
    398,120
    
    
    
    49.8
    %$
    12,272,203
    
    
    
    31.1
    %
    
    $
    9,359,741
    
    
    
    24.5
    %Operating EarningsEast
    
    $
    449,587
    
    
    
    45.2
    %
    
    $
    309,673
    
    
    
    42.7
    %Southeast
    
    
    373,908
    
    
    
    71.6
    %
    
    
    217,921
    
    
    
    16.6
    %Central
    
    
    87,477
    
    
    
    (30.9
    %)
    
    
    126,678
    
    
    
    2.8
    %Texas
    
    
    85,284
    
    
    
    23.6
    %
    
    
    68,996
    
    
    
    (21.5
    %)Northwest
    
    
    496,764
    
    
    
    46.1
    %
    
    
    339,993
    
    
    
    87.6
    %Southwest
    
    
    521,324
    
    
    
    18.5
    %
    
    
    439,882
    
    
    
    67.0
    %Other homebuilding
    
    
    70,485
    
    
    
    67.2
    %
    
    
    42,158
    
    
    
    40.6
    %$
    2,084,829
    
    
    
    34.9
    %
    
    $
    1,545,301
    
    
    
    41.8
    %
 East
   Southeast
   38




---



##### Table of Contents



Central
   Texas
   Northwest
   Southwest
   Other homebuilding
  39




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##### Table of Contents



FINANCIAL SERVICES
  For the Years Ended March 31,2006
    
    
    2005Change
    
    
    
    
    
    
    ChangeRevenues
    
    $
    462,223
    
    
    
    9.6
    %
    
    $
    421,653
    
    
    
    (19.1
    %)Cost of Sales
    
    
    (65,904
    )
    
    
    105.0
    %
    
    
    (32,149
    )
    
    
    46.6
    %Selling, General and Administrative Expenses
    
    
    (311,854
    )
    
    
    6.2
    %
    
    
    (293,532
    )
    
    
    (12.0
    %)Operating Earnings
    
    $
    84,465
    
    
    
    (12.0
    %)
    
    $
    95,972
    
    
    
    (42.1
    %)Operating Margin
    
    
    18.3
    %
    
    
    (4.5
    )
    
    
    22.8
    %
    
    
    (9.0
    )Interest Margin
    
    $
    38,201
    
    
    
    (22.9
    %)
    
    $
    49,532
    
    
    
    4.4
    %Average Interest Earning Assets
    
    $
    1,574,856
    
    
    
    12.8
    %
    
    $
    1,395,639
    
    
    
    5.3
    %Average Yield
    
    
    6.61
    %
    
    
    0.76
    
    
    
    5.85
    %
    
    
    0.13Average Interest Bearing Liabilities
    
    $
    1,574,235
    
    
    
    15.4
    %
    
    $
    1,364,106
    
    
    
    9.5
    %Average Rate Paid
    
    
    4.18
    %
    
    
    1.84
    
    
    
    2.34
    %
    
    
    0.39
   For the Years Ended March 31,2006
    
    2005Change
    
    
    
    
    
    ChangeLoan Sales to Investors (in millions)
    
    $
    11,845.5
    
    
    
    27.0
    %
    
    $
    9,328.6
    
    
    
    (28.9
    %)Gain on Sale of Mortgage Loans
    
    $
    164,804
    
    
    
    16.3
    %
    
    $
    141,745
    
    
    
    (42.3
    %)
  40




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##### Table of Contents



For the Years Ended March 31,2006
    
    
    2005Change
    
    
    
    
    
    
    ChangeOrigination Volume (in millions)
    
    $
    15,827.4
    
    
    
    21.4
    %
    
    $
    13,039.0
    
    
    
    (13.7
    %)Number of Loans OriginatedBuilder
    
    
    27,364
    
    
    
    21.5
    %
    
    
    22,517
    
    
    
    7.9
    %Retail
    
    
    43,319
    
    
    
    (3.3
    %)
    
    
    44,816
    
    
    
    (33.6
    %)70,683
    
    
    
    5.0
    %
    
    
    67,333
    
    
    
    (23.8
    %)Number of Loan ApplicationsBuilder
    
    
    27,765
    
    
    
    12.7
    %
    
    
    24,631
    
    
    
    2.5
    %Retail
    
    
    38,521
    
    
    
    (3.3
    %)
    
    
    39,848
    
    
    
    (39.2
    %)66,286
    
    
    
    2.8
    %
    
    
    64,479
    
    
    
    (28.0
    %)Average Loan Size  Originated Loans
    
    $
    223,900
    
    
    
    15.7
    %
    
    $
    193,600
    
    
    
    13.2
    %
   OTHER
  For the Years Ended March 31,2006
    
    
    2005Change
    
    
    
    
    
    
    ChangeOperating Loss from Home Services
Operations
    
    $
    (7,498
    )
    
    
    (52.7
    %)
    
    $
    (15,856
    )
    
    
    590.0
    %Operating Earnings from Investment
Real Estate Operations
    
    
    1,719
    
    
    
    (92.0
    %)
    
    
    21,422
    
    
    
    (52.1
    %)Corporate General and Administrative
Expenses
    
    
    (279,172
    )
    
    
    12.0
    %
    
    
    (249,360
    )
    
    
    8.8
    %Interest Expense
    
    
    (12,067
    )
    
    
    (37.6
    %)
    
    
    (19,348
    )
    
    
    (51.1
    %)Operating Loss
    
    $
    (297,018
    )
    
    
    12.9
    %
    
    $
    (263,142
    )
    
    
    16.3
    %
   41




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##### Table of Contents



For the Years Ended March 31,2006
    
    
    2005Change
    
    
    
    
    
    
    ChangeCompensation and Benefits
    
    $
    219,556
    
    
    
    8.9
    %
    
    $
    201,663
    
    
    
    5.4
    %Professional Services
    
    
    24,593
    
    
    
    74.4
    %
    
    
    14,105
    
    
    
    6.0
    %Rent and Utilities
    
    
    6,854
    
    
    
    37.4
    %
    
    
    4,990
    
    
    
    15.4
    %Travel
    
    
    9,795
    
    
    
    16.7
    %
    
    
    8,396
    
    
    
    11.9
    %Other
    
    
    18,374
    
    
    
    (9.1
    %)
    
    
    20,206
    
    
    
    57.6
    %General and Administrative Expenses
    
    $
    279,172
    
    
    
    12.0
    %
    
    $
    249,360
    
    
    
    8.8
    %
    DISCONTINUED OPERATIONS
 International Home Building
   For the Years Ended March 31,2006
    
    2005Revenues
    
    $
    224,415
    
    
    $
    501,257Operating Earnings
    
    $
    15,211
    
    
    $
    66,587Pre-tax Gain on Sale
    
    $
    6,500
    
    
    $
    
  42




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##### Table of Contents



Home Equity
  For the Years Ended March 31,2006
    
    2005Change
    
    
    
    
    
    ChangeRevenues
    
    $
    837,888
    
    
    
    22.2
    %
    
    $
    685,553
    
    
    
    30.1
    %Operating Earnings
    
    $
    121,686
    
    
    
    12.3
    %
    
    $
    108,383
    
    
    
    68.0
    %Interest Margin
    
    $
    303,412
    
    
    
    (3.7
    %)
    
    $
    315,103
    
    
    
    23.8
    %
   Construction Services
  For the Years Ended March 31,2006
    
    2005Change
    
    
    
    
    
    ChangeRevenues
    
    $
    1,606,609
    
    
    
    (7.6
    %)
    
    $
    1,738,603
    
    
    
    8.9
    %Operating Earnings
    
    $
    26,838
    
    
    
    14.1
    %
    
    $
    23,524
    
    
    
    43.3
    %
  43




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##### Table of Contents



FINANCIAL CONDITION AND LIQUIDITY
  For the Years Ended March 31,2007
    
    
    2006
    
    
    2005Net Cash (Used in) Provided byCentex*Operating Activities
    
    $
    930,116
    
    
    $
    (667,292
    )
    
    $
    (506,007
    )Investing Activities
    
    
    46,120
    
    
    
    77,133
    
    
    
    (50,816
    )Financing Activities
    
    
    (142,259
    )
    
    
    138,041
    
    
    
    891,926Effect of Exchange Rate on Cash
    
    
    
    
    
    
    (1,479
    )
    
    
    (5,385
    )833,977
    
    
    
    (453,597
    )
    
    
    329,718Financial ServicesOperating Activities
    
    
    578,828
    
    
    
    12,996
    
    
    
    279,388Investing Activities
    
    
    78,394
    
    
    
    786,790
    
    
    
    (1,589,622
    )Financing Activities
    
    
    (656,400
    )
    
    
    (800,820
    )
    
    
    1,304,243822
    
    
    
    (1,034
    )
    
    
    (5,991
    )Centex Corporation and SubsidiariesOperating Activities
    
    
    948,337
    
    
    
    (763,381
    )
    
    
    (238,890
    )Investing Activities
    
    
    89,341
    
    
    
    900,261
    
    
    
    (1,677,167
    )Financing Activities
    
    
    (202,879
    )
    
    
    (590,032
    )
    
    
    2,245,169Effect of Exchange Rate on Cash
    
    
    
    
    
    
    (1,479
    )
    
    
    (5,385
    )Net (Decrease) Increase in Cash
    
    $
    834,799
    
    
    $
    (454,631
    )
    
    $
    323,727
 
 *
    
    Centex represents a supplemental presentation that reflects the Financial Services segment
as if accounted for under the equity method. We believe that separate disclosure of the
consolidating information is useful because the Financial Services subsidiaries and related
companies operate in a distinctly different financial environment that generally requires
significantly less equity to support their higher debt levels compared to the operations of our
other subsidiaries; the Financial Services subsidiaries and related companies have structured their
financing programs substantially on a stand alone basis; and Centex has limited obligations with
respect to the indebtedness of our Financial Services subsidiaries and related companies.
Management uses this information in its financial and strategic planning. We also use this
presentation to allow investors to compare us to homebuilders that do not have financial services
operations.  Centex
  44




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##### Table of Contents



Financial Services
  Discontinued Operations
    Future Cash Sources and Uses
  Payments Due by PeriodLess Than
    
    
    1  3
    
    
    3  5
    
    
    More Than1 Year
    
    
    Years
    
    
    Years
    
    
    5 Years
    
    
    TotalCentexLong-term Debt (1)
    
    $
    745,028
    
    
    $
    761,695
    
    
    $
    1,351,822
    
    
    $
    2,230,152
    
    
    $
    5,088,697Operating Leases
    
    
    53,638
    
    
    
    86,852
    
    
    
    57,759
    
    
    
    52,432
    
    
    
    250,681Purchase Obligations
    
    
    35,160
    
    
    
    12,582
    
    
    
    3,689
    
    
    
    
    
    
    
    51,431833,826
    
    
    
    861,129
    
    
    
    1,413,270
    
    
    
    2,282,584
    
    
    
    5,390,809Financial ServicesLong-term Debt (2)
    
    
    3,192
    
    
    
    64,788
    
    
    
    
    
    
    
    
    
    
    
    67,980Operating Leases
    
    
    15,115
    
    
    
    14,168
    
    
    
    4,415
    
    
    
    2,676
    
    
    
    36,37418,307
    
    
    
    78,956
    
    
    
    4,415
    
    
    
    2,676
    
    
    
    104,354$
    852,133
    
    
    $
    940,085
    
    
    $
    1,417,685
    
    
    $
    2,285,260
    
    
    $
    5,495,163
 
 (1)
    
    The amount of debt subject to a variable interest rate is $190.3 million, of which $170.0
million was based on the U.S. 3 month Libor rate of 5.36% at March 31, 2007 and $20.3 million
was based on the U.S. 1 month Libor rate of 5.32% at March 31, 2007.(2)
    
    The amount of debt subject to a variable interest rate is $60.0 million. The basis of the
rate is U.S. 1 month Libor which was 5.32% at March 31, 2007. 
 45




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##### Table of Contents



Existing Credit
    
    
    AvailableFacilities
    
    
    CapacityCentexMulti-Bank Revolving Credit FacilityRevolving Credit
    
    $
    1,250,000
    
    
    $
    1,250,000Letters of Credit
    
    
    835,000
    
    
    
    493,1472,085,000
    
    
    
    1,743,147
    (1) (2)Financial ServicesSecured Credit Facilities
    
    
    440,000
    
    
    
    328,856
    (3)Mortgage Conduit Facilities
    
    
    650,000
    
    
    
    333,000
    (4)Harwood Street Funding I, LLC Facility
    
    
    3,000,000
    
    
    
    1,762,4824,090,000
    
    
    
    2,424,338$
    6,175,000
    
    
    $
    4,167,485
 
 (1)
    
    This is an unsecured, committed, multi-bank revolving credit facility, maturing in July
2010, which serves as backup for Centex Corporations $1.25 billion commercial paper program
and provides $835 million of letter of credit capacity. As of March 31, 2007, the $1.25
billion commercial paper program had no amounts outstanding. There have been no direct
borrowings under this revolving credit facility since its inception.(2)
    
    Centex maintains a minimum of $100 million in unused committed credit at all times in
conjunction with certain remaining surety bond obligations relating to Construction Services
projects commenced prior to the sale of Construction Services on March 30, 2007. Following
the sale of Construction Services, the purchaser is subject to an AA- (S&P), Aa3 (Moodys)
back-up indemnity, which indemnifies Centex Corporation against any loss under any such letter of credit.(3)
    
    CTX Mortgage Company, LLC maintains $440 million of secured, committed mortgage warehouse
facilities.(4)
    
    A wholly-owned limited purpose subsidiary of CTX Mortgage Company, LLC maintains secured,
committed facilities funded through commercial paper conduits to finance the purchase of
certain mortgage loans from CTX Mortgage Company, LLC.  46




---



##### Table of Contents



CentexShort-term Debt:Short-term Note Payable
    
    $
    1,807Senior Debt:Medium-term Note Programs, weighted-average 5.61% due through 2008
    
    
    170,000Senior Notes, weighted-average 5.89%, due through 2017
    
    
    3,708,976Other Indebtedness, weighted-average 6.57%, due through 2018
    
    
    23,6423,904,425Financial ServicesShort-term Debt:Short-term Notes Payable
    
    
    428,144Harwood Street Funding I, LLC Secured Liquidity Notes
    
    
    1,174,896Harwood Street Funding I, LLC Variable Rate Subordinated Extendable
Certificates, weighted-average 7.32%, due through 2010
    
    
    60,0001,663,040$
    5,567,465
  CERTAIN OFF-BALANCE SHEET OBLIGATIONS
  Joint Ventures
   47




---



##### Table of Contents



As of March 31,2007
    
    
    2006Number of Active Joint Ventures (1)
    
    
    49
    
    
    
    44Investment in Joint Ventures
    
    $
    281,644
    
    
    $
    307,756Total Joint Venture Debt (2)
    
    $
    1,000,599
    
    
    $
    1,053,201Centexs Share of Joint Venture Debt:Based on Centexs Ownership Percentage
    
    $
    412,397
    
    
    $
    388,428Based on Limited Debt Recourse Provisions:Limited Maintenance Guarantee (3) (5)
    
    $
    162,425
    
    
    $
    228,603Repayment Guarantee (4) (5)
    
    
    12,055
    
    
    
    8,136Total Limited Debt Recourse
    
    $
    174,480
    
    
    $
    236,739
 
 (1)
    
    The number of active joint ventures includes unconsolidated Home Building joint
ventures for which we have an investment balance as of the end of the period and/or
current fiscal year activity. We are the managing member of 28 and 24 of the active
joint ventures as of March 31, 2007 and 2006, respectively.(2)
    
    As of March 31, 2007 and 2006, 21 and 23, respectively, of the active joint
ventures have outstanding debt.(3)
    
    We have guaranteed that certain of the joint ventures will maintain a specified
loan to value ratio. For certain joint ventures, we have contributed additional
capital in order to maintain loan to value requirements.(4)
    
    We have guaranteed repayment of a portion of certain joint venture debt limited
to our ownership percentage of the joint venture or a percentage thereof.(5)
    
    These amounts represent our maximum exposure related to the joint ventures
debt at each respective date.  CRITICAL ACCOUNTING ESTIMATES
  Inventory Valuation
  48




---



##### Table of Contents




    
    estimates of average future selling prices,
    
    estimates of future construction and land development costs, and
    
    estimated future sales rates.
  
    
    historical project results such as average sales price and sales rates, if closings
have occurred in the project,
    
    competitors local market (or submarket) presence and their competitive actions,
    
    project specific attributes such as location desirability and uniqueness of product offering,
    
    potential for alternative product offerings to respond to local market conditions, and
    
    current local market economic and demographic conditions and related trends and forecasts.
  
    
    geographic location of project,
    
    product type (for example, multifamily high rise product or single family product), and
    
    estimated project life.
   Land Held Under Option Agreements Not Owned and Other Land Deposits
   49




---



##### Table of Contents




    
    acquiring the land we control under option agreements.
    
    local market housing inventory levels; both existing and new homes,
    
    our existing local supply of owned and controlled lots,
    
    contract purchase price and terms,
    
    evaluation of local regulatory environment and, if not fully entitled, likelihood of obtaining required approvals, and
    
    local market economic and demographic factors such as job growth, long-
and short-term interest rates, consumer confidence, population growth and immigration.
 Goodwill
   Warranty Accruals
  50




---



##### Table of Contents



Loan Origination Reserve
   Insurance Accruals
  Income Taxes
   RECENT ACCOUNTING PRONOUNCEMENTS
  51




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##### Table of Contents









ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Centex
    Maturities through March 31,2008
    
    2009
    
    2010
    
    2011
    
    2012
    
    Thereafter
    
    Total
    
    Fair ValueCentex (1)Fixed-Rate Debt
    
    $
    336,450
    
    
    $
    150,669
    
    
    $
    225,222
    
    
    $
    700,222
    
    
    $
    349,232
    
    
    $
    1,950,490
    
    
    $
    3,712,285
    
    
    $
    3,656,705Average Interest Rate
    
    
    4.83
    %
    
    
    4.88
    %
    
    
    5.80
    %
    
    
    6.45
    %
    
    
    7.50
    %
    
    
    5.67
    %
    
    
    5.89
    %Variable-Rate Debt
    
    $
    190,333
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    190,333
    
    
    $
    192,378Average Interest Rate
    
    
    5.70
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5.70
    %
 
 (1)
    
    We define Centex as a supplemental presentation that reflects the Financial Services
segment as if accounted for under the equity method. 52




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##### Table of Contents



Maturities through March 31,2007
    
    2008
    
    2009
    
    2010
    
    2011
    
    Thereafter
    
    Total
    
    Fair ValueCentex (1)Fixed-Rate Debt
    
    $
    204,465
    
    
    $
    438,340
    
    
    $
    208,650
    
    
    $
    225,073
    
    
    $
    700,066
    
    
    $
    1,799,100
    
    
    $
    3,575,694
    
    
    $
    3,566,902Average Interest Rate
    
    
    7.99
    %
    
    
    5.94
    %
    
    
    6.31
    %
    
    
    5.80
    %
    
    
    6.45
    %
    
    
    5.79
    %
    
    
    6.10
    %Variable-Rate Debt
    
    $
    88,000
    
    
    $
    191,333
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    279,333
    
    
    $
    280,481Average Interest Rate
    
    
    6.56
    %
    
    
    5.02
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5.51
    %
 
 (1)
    
    We define Centex as a supplemental presentation that reflects the Financial Services
segment as if accounted for under the equity method. Financial Services
      Maturities through March 31,2008
    
    2009
    
    2010
    
    2011
    
    2012
    
    Thereafter
    
    Total
    
    Fair ValueFinancial Services (1)Variable-Rate Debt
    
    $
    
    
    
    $
    
    
    
    $
    60,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    60,000
    
    
    $
    58,688Average Interest Rate
    
    
    
    
    
    
    
    
    
    
    7.32
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.32
    %
 
 (1)
    
    We define Financial Services as a supplemental presentation that reflects Centex Financial
Services, its subsidiaries and related companies.  Maturities through March 31,2007
    
    2008
    
    2009
    
    2010
    
    2011
    
    Thereafter
    
    Total
    
    Fair ValueFinancial Services (1)Variable-Rate Debt
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    60,000
    
    
    $
    
    
    
    $
    
    
    
    $
    60,000
    
    
    $
    60,093Average Interest Rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.83
    %
    
    
    
    
    
    
    
    
    
    
    6.83
    %
 
 (1)
    
    We define Financial Services as a supplemental presentation that reflects Centex Financial
Services, its subsidiaries and related companies. 53




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##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 PageFinancial InformationStatements of Consolidated Earnings
    
    
    55Consolidated Balance Sheets with Consolidating Details
    
    
    56Statements of Consolidated Cash Flows with Consolidating Details
    
    
    58Statements of Consolidated Stockholders Equity
    
    
    60Notes to Consolidated Financial Statements
    
    
    62Report of Independent Registered Public Accounting Firm
    
    
    92Managements Report on Internal Control Over Financial Reporting
    
    
    93Report of Independent Registered Public Accounting Firm  Internal Control
    
    
    94Quarterly Results
    
    
    95
 54




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##### Table of Contents



Centex Corporation and Subsidiaries
 
 Statements of Consolidated Earnings
 (Dollars in thousands, except per share data)
 For the Years Ended March 31,2007
    
    
    2006
    
    
    2005RevenuesHome Building
    
    $
    11,414,827
    
    
    $
    12,272,203
    
    
    $
    9,359,741Financial Services
    
    
    468,001
    
    
    
    462,223
    
    
    
    421,653Other
    
    
    131,739
    
    
    
    117,438
    
    
    
    152,88812,014,567
    
    
    
    12,851,864
    
    
    
    9,934,282Costs and ExpensesHome Building
    
    
    11,166,921
    
    
    
    10,273,372
    
    
    
    7,883,226Financial Services
    
    
    383,471
    
    
    
    377,758
    
    
    
    325,681Other
    
    
    133,264
    
    
    
    123,217
    
    
    
    147,322Corporate General and Administrative
    
    
    185,585
    
    
    
    279,172
    
    
    
    249,360Interest Expense
    
    
    
    
    
    
    12,067
    
    
    
    19,34811,869,241
    
    
    
    11,065,586
    
    
    
    8,624,937Earnings (Loss) from Unconsolidated Entities and Other
    
    
    (42,553
    )
    
    
    85,998
    
    
    
    68,786Earnings from Continuing OperationsBefore Income Taxes
    
    
    102,773
    
    
    
    1,872,276
    
    
    
    1,378,131Income Taxes
    
    
    114,553
    
    
    
    665,187
    
    
    
    492,323Earnings (Loss) from Continuing Operations
    
    
    (11,780
    )
    
    
    1,207,089
    
    
    
    885,808Earnings from Discontinued Operations, net of Tax
Provision of $172,733, $80,902 and $70,082
    
    
    280,146
    
    
    
    82,224
    
    
    
    125,556Net Earnings
    
    $
    268,366
    
    
    $
    1,289,313
    
    
    $
    1,011,364Basic Earnings (Loss) Per ShareContinuing Operations
    
    $
    (0.10
    )
    
    $
    9.51
    
    
    $
    7.08Discontinued Operations
    
    
    2.33
    
    
    
    0.65
    
    
    
    1.00$
    2.23
    
    
    $
    10.16
    
    
    $
    8.08Diluted Earnings (Loss) Per ShareContinuing Operations
    
    $
    (0.10
    )
    
    $
    9.09
    
    
    $
    6.69Discontinued Operations
    
    
    2.33
    
    
    
    0.62
    
    
    
    0.95$
    2.23
    
    
    $
    9.71
    
    
    $
    7.64Average Shares OutstandingBasic
    
    
    120,537,235
    
    
    
    126,870,887
    
    
    
    125,226,596Dilutive Securities:Options
    
    
    
    
    
    
    5,420,789
    
    
    
    6,725,838Other
    
    
    
    
    
    
    458,121
    
    
    
    445,527Diluted
    
    
    120,537,235
    
    
    
    132,749,797
    
    
    
    132,397,961Cash Dividends Per Share
    
    $
    0.16
    
    
    $
    0.16
    
    
    $
    0.16
 See Notes to Consolidated Financial Statements.
 55




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##### Table of Contents



Centex Corporation and Subsidiaries
 
 Consolidated Balance Sheets with Consolidating Details
 (Dollars in thousands)
 Centex Corporation and SubsidiariesMarch 31,2007
    
    
    2006AssetsCash and Cash Equivalents
    
    $
    882,754
    
    
    $
    43,350Restricted Cash
    
    
    146,532
    
    
    
    133,381Receivables -Mortgage Loans
    
    
    1,694,129
    
    
    
    2,129,538Trade, including Notes of $10,295 and $31,897
    
    
    227,618
    
    
    
    326,510From Affiliates
    
    
    
    
    
    
    Inventories -Housing Projects
    
    
    8,495,982
    
    
    
    8,422,758Land Held for Development and Sale
    
    
    158,212
    
    
    
    409,295Land Held Under Option Agreements Not Owned
    
    
    282,116
    
    
    
    817,881Other
    
    
    14,769
    
    
    
    11,615Investments -Joint Ventures and Other
    
    
    281,644
    
    
    
    307,756Unconsolidated Subsidiaries
    
    
    
    
    
    
    Property and Equipment, net
    
    
    136,172
    
    
    
    178,008Other Assets -Deferred Income Taxes
    
    
    489,814
    
    
    
    237,021Goodwill
    
    
    219,042
    
    
    
    217,728Deferred Charges and Other, net
    
    
    176,975
    
    
    
    231,017Assets of Discontinued Operations
    
    
    
    
    
    
    7,899,141$
    13,205,759
    
    
    $
    21,364,999Liabilities and Stockholders EquityAccounts Payable
    
    $
    520,833
    
    
    $
    617,006Accrued Liabilities
    
    
    1,828,255
    
    
    
    1,565,301Debt -Centex
    
    
    3,904,425
    
    
    
    3,982,193Financial Services
    
    
    1,663,040
    
    
    
    2,077,215Liabilities of Discontinued Operations
    
    
    
    
    
    
    7,580,693Commitments and ContingenciesMinority Interests
    
    
    176,937
    
    
    
    530,933Stockholders Equity -Preferred Stock, Authorized 5,000,000 Shares, None Issued
    
    
    
    
    
    
    Common Stock, $.25 Par Value; Authorized 300,000,000
Shares; Outstanding 119,969,733 and 122,103,713 Shares
    
    
    31,041
    
    
    
    34,132Capital in Excess of Par Value
    
    
    48,349
    
    
    
    580,010Retained Earnings
    
    
    5,250,873
    
    
    
    5,251,325Treasury Stock, at Cost; 4,193,523 and 14,424,807 Shares
    
    
    (217,994
    )
    
    
    (862,439
    )Accumulated Other Comprehensive Income
    
    
    
    
    
    
    8,630Total Stockholders Equity
    
    
    5,112,269
    
    
    
    5,011,658$
    13,205,759
    
    
    $
    21,364,999
 See Notes to Consolidated Financial Statements.
 56




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##### Table of Contents



Centex Corporation and Subsidiaries
Consolidated Balance Sheets with Consolidating Details  (Dollars in thousands)
 Centex*
    
    
    Financial ServicesMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006$
    870,688
    
    
    $
    32,893
    
    
    $
    12,066
    
    
    $
    10,45756,467
    
    
    
    68,728
    
    
    
    90,065
    
    
    
    64,653
    
    
    
    
    
    
    
    1,694,129
    
    
    
    2,129,538175,683
    
    
    
    282,636
    
    
    
    51,935
    
    
    
    43,874
    
    
    
    
    
    
    
    23,788
    
    
    
    9,1108,495,982
    
    
    
    8,422,758
    
    
    
    
    
    
    
    158,212
    
    
    
    409,295
    
    
    
    
    
    
    
    282,116
    
    
    
    817,881
    
    
    
    
    
    
    
    6,022
    
    
    
    5,361
    
    
    
    8,747
    
    
    
    6,254281,644
    
    
    
    307,756
    
    
    
    
    
    
    
    137,704
    
    
    
    655,266
    
    
    
    
    
    
    
    119,203
    
    
    
    155,862
    
    
    
    16,969
    
    
    
    22,146465,247
    
    
    
    220,559
    
    
    
    24,567
    
    
    
    16,462210,090
    
    
    
    205,991
    
    
    
    8,952
    
    
    
    11,737163,497
    
    
    
    208,871
    
    
    
    13,478
    
    
    
    22,146
    
    
    
    388,979
    
    
    
    
    
    
    
    7,510,162$
    11,422,555
    
    
    $
    12,182,836
    
    
    $
    1,944,696
    
    
    $
    9,846,539$
    510,106
    
    
    $
    601,778
    
    
    $
    10,727
    
    
    $
    15,2281,719,753
    
    
    
    1,478,547
    
    
    
    108,502
    
    
    
    86,7543,904,425
    
    
    
    3,982,193
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,663,040
    
    
    
    2,077,215
    
    
    
    578,900
    
    
    
    
    
    
    
    7,001,793176,002
    
    
    
    529,760
    
    
    
    935
    
    
    
    1,173
    
    
    
    
    
    
    
    
    
    
    
    31,041
    
    
    
    34,132
    
    
    
    1
    
    
    
    148,349
    
    
    
    580,010
    
    
    
    275,467
    
    
    
    275,4675,250,873
    
    
    
    5,251,325
    
    
    
    (113,976
    )
    
    
    380,206(217,994
    )
    
    
    (862,439
    )
    
    
    
    
    
    
    
    
    
    
    8,630
    
    
    
    
    
    
    
    8,7025,112,269
    
    
    
    5,011,658
    
    
    
    161,492
    
    
    
    664,376$
    11,422,555
    
    
    $
    12,182,836
    
    
    $
    1,944,696
    
    
    $
    9,846,539
 
 *
    
    In the supplemental data presented above, Centex represents the consolidation of all
subsidiaries other than those included in Financial Services as described in Note (A), Significant
Accounting Policies. Transactions between Centex and Financial Services have been eliminated from
the Centex Corporation and Subsidiaries balance sheets. 57




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##### Table of Contents



Centex Corporation and Subsidiaries
 
 Statements of Consolidated Cash Flows with Consolidating Details
 (Dollars in thousands)
 Centex Corporation and SubsidiariesFor the Years Ended March 31,2007
    
    
    2006
    
    
    2005Cash Flows  Operating ActivitiesNet Earnings
    
    $
    268,366
    
    
    $
    1,289,313
    
    
    $
    1,011,364AdjustmentsDepreciation and Amortization
    
    
    59,795
    
    
    
    63,069
    
    
    
    58,259Stock-based Compensation
    
    
    64,850
    
    
    
    68,743
    
    
    
    49,100Provision for Losses on Mortgage Loans Held for Investment
    
    
    22,364
    
    
    
    94,319
    
    
    
    98,801Impairment and Write-off of Land-related Assets
    
    
    690,831
    
    
    
    35,155
    
    
    
    16,330Deferred Income Tax (Benefit) Provision
    
    
    (172,235
    )
    
    
    (127,699
    )
    
    
    (6,537
    )Loss (Earnings) of Joint Ventures and Unconsolidated Subsidiaries
    
    
    72,807
    
    
    
    (78,323
    )
    
    
    (55,994
    )Distributions of Earnings of Joint Ventures and
Unconsolidated Subsidiaries
    
    
    89,225
    
    
    
    96,318
    
    
    
    90,191Minority Interest, net of Taxes
    
    
    (413
    )
    
    
    (315
    )
    
    
    (388
    )Gain on Sale of Businesses
    
    
    (482,331
    )
    
    
    (6,500
    )
    
    
    Changes in Assets and Liabilities, Excluding Effect of AcquisitionsDecrease (Increase) in Restricted Cash
    
    
    11,233
    
    
    
    (19,301
    )
    
    
    (1,772
    )Decrease (Increase) in Receivables
    
    
    19,676
    
    
    
    (88,132
    )
    
    
    (121,375
    )Decrease (Increase) in Mortgage Loans Held for Sale
    
    
    518,356
    
    
    
    (199,957
    )
    
    
    107,755Increase in Housing Projects and Land Held for Development and
Sale
    
    
    (478,199
    )
    
    
    (2,482,554
    )
    
    
    (1,944,591
    )(Increase) Decrease in Other Inventories
    
    
    (3,114
    )
    
    
    (1,368
    )
    
    
    47,837Increase (Decrease) in Accounts Payable and Accrued Liabilities
    
    
    226,818
    
    
    
    635,713
    
    
    
    421,227Decrease (Increase) in Other Assets, net
    
    
    40,475
    
    
    
    (42,264
    )
    
    
    (15,866
    )(Decrease) Increase in Payables to Affiliates
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    (167
    )
    
    
    402
    
    
    
    6,769948,337
    
    
    
    (763,381
    )
    
    
    (238,890
    )Cash Flows  Investing ActivitiesPayments received on (Issuance of) Notes Receivable
    
    
    21,768
    
    
    
    25,174
    
    
    
    (15,750
    )(Increase) Decrease in Mortgage Loans Held for Investment
    
    
    (292,448
    )
    
    
    952,449
    
    
    
    (1,515,072
    )Increase in Construction Loans
    
    
    (89,866
    )
    
    
    (154,257
    )
    
    
    (63,474
    )Investment in and Advances to Joint Ventures
    
    
    (268,206
    )
    
    
    (372,937
    )
    
    
    (223,857
    )Distributions of Capital from Joint Ventures
    
    
    158,658
    
    
    
    218,544
    
    
    
    181,099Decrease (Increase) in Investment in and Advances to
Unconsolidated Subsidiaries
    
    
    
    
    
    
    
    
    
    
    Purchases of Property and Equipment, net
    
    
    (40,643
    )
    
    
    (92,234
    )
    
    
    (43,313
    )Proceeds from Dispositions
    
    
    606,759
    
    
    
    327,415
    
    
    
    9,267Other
    
    
    (6,681
    )
    
    
    (3,893
    )
    
    
    (6,067
    )89,341
    
    
    
    900,261
    
    
    
    (1,677,167
    )Cash Flows  Financing ActivitiesIncrease in Restricted Cash
    
    
    (53,522
    )
    
    
    (15,501
    )
    
    
    (65,713
    )(Decrease) Increase in Short-term Debt, net
    
    
    (346,903
    )
    
    
    764,540
    
    
    
    371,230CentexIssuance of Long-term Debt
    
    
    500,695
    
    
    
    972,028
    
    
    
    1,034,509Repayment of Long-term Debt
    
    
    (293,620
    )
    
    
    (343,322
    )
    
    
    (217,324
    )Financial ServicesIssuance of Long-term Debt
    
    
    961,126
    
    
    
    2,008,372
    
    
    
    3,764,701Repayment of Long-term Debt
    
    
    (746,680
    )
    
    
    (3,366,188
    )
    
    
    (2,709,105
    )Proceeds from Stock Option Exercises
    
    
    66,142
    
    
    
    58,971
    
    
    
    87,797Purchases of Common Stock, net
    
    
    (271,022
    )
    
    
    (648,638
    )
    
    
    (979
    )Dividends Paid
    
    
    (19,095
    )
    
    
    (20,294
    )
    
    
    (19,947
    )(202,879
    )
    
    
    (590,032
    )
    
    
    2,245,169Effect of Exchange Rate on Cash
    
    
    
    
    
    
    (1,479
    )
    
    
    (5,385
    )Net Increase (Decrease) in Cash and Cash Equivalents
    
    
    834,799
    
    
    
    (454,631
    )
    
    
    323,727Cash and Cash Equivalents at Beginning of Year(1)
    
    
    47,955
    
    
    
    502,586
    
    
    
    178,859Cash and Cash Equivalents at End of Year(2)
    
    $
    882,754
    
    
    $
    47,955
    
    
    $
    502,586
 See Notes to Consolidated Financial Statements.
 
 (1)
    
    Amount includes cash and cash equivalents of discontinued operations of $4,605, $6,170 and
$10,067 as of March 31, 2006, 2005 and 2004, respectively.(2)
    
    Amount includes cash and cash equivalents of discontinued operations of $0, $4,605 and $6,170
as of March 31, 2007, 2006 and 2005, respectively. 58




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##### Table of Contents



Centex Corporation and Subsidiaries
Statements of Consolidated Cash Flows with Consolidating Details  ( Dollars in thousands )
 Centex *
    
    
    Financial ServicesFor the Years Ended March 31,
    
    
    For the Years Ended March 31,2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005$
    268,366
    
    
    $
    1,289,313
    
    
    $
    1,011,364
    
    
    $
    101,596
    
    
    $
    119,385
    
    
    $
    126,07851,491
    
    
    
    48,081
    
    
    
    40,444
    
    
    
    8,304
    
    
    
    14,988
    
    
    
    17,81564,850
    
    
    
    68,743
    
    
    
    49,100
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,364
    
    
    
    94,319
    
    
    
    98,801683,912
    
    
    
    35,155
    
    
    
    16,330
    
    
    
    6,919
    
    
    
    
    
    
    
    (243,664
    )
    
    
    (55,196
    )
    
    
    (67,223
    )
    
    
    71,429
    
    
    
    (72,503
    )
    
    
    60,686(28,789
    )
    
    
    (197,708
    )
    
    
    (182,072
    )
    
    
    
    
    
    
    
    
    
    
    685,005
    
    
    
    169,065
    
    
    
    139,191
    
    
    
    
    
    
    
    
    
    
    
    (175
    )
    
    
    (126
    )
    
    
    (215
    )
    
    
    (238
    )
    
    
    (189
    )
    
    
    (173
    )(349,524
    )
    
    
    (6,500
    )
    
    
    
    
    
    
    (132,807
    )
    
    
    
    
    
    
    14,261
    
    
    
    (17,485
    )
    
    
    (2,899
    )
    
    
    (3,028
    )
    
    
    (1,816
    )
    
    
    1,12725,614
    
    
    
    (88,073
    )
    
    
    (101,871
    )
    
    
    (5,938
    )
    
    
    (59
    )
    
    
    (19,504
    )
    
    
    
    
    
    
    
    
    
    
    
    518,356
    
    
    
    (199,957
    )
    
    
    107,755(478,199
    )
    
    
    (2,482,554
    )
    
    
    (1,944,591
    )
    
    
    
    
    
    
    
    
    
    
    (621
    )
    
    
    (1,420
    )
    
    
    45,203
    
    
    
    (2,493
    )
    
    
    52
    
    
    
    2,634212,157
    
    
    
    622,375
    
    
    
    509,793
    
    
    
    5,959
    
    
    
    13,828
    
    
    
    (64,676
    )25,599
    
    
    
    (51,364
    )
    
    
    (28,561
    )
    
    
    14,876
    
    
    
    9,100
    
    
    
    12,695
    
    
    
    
    
    
    
    
    
    
    
    (26,471
    )
    
    
    35,848
    
    
    
    (60,619
    )(167
    )
    
    
    402
    
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    (3,231
    )930,116
    
    
    
    (667,292
    )
    
    
    (506,007
    )
    
    
    578,828
    
    
    
    12,996
    
    
    
    279,38821,662
    
    
    
    24,937
    
    
    
    (15,426
    )
    
    
    106
    
    
    
    237
    
    
    
    (324
    )
    
    
    
    
    
    
    
    
    
    
    
    (292,448
    )
    
    
    952,449
    
    
    
    (1,515,072
    )
    
    
    
    
    
    
    
    
    
    
    
    (89,866
    )
    
    
    (154,257
    )
    
    
    (63,474
    )(268,206
    )
    
    
    (372,937
    )
    
    
    (223,857
    )
    
    
    
    
    
    
    
    
    
    
    158,658
    
    
    
    218,544
    
    
    
    181,099
    
    
    
    
    
    
    
    
    
    
    
    23,378
    
    
    
    (36,338
    )
    
    
    36,729
    
    
    
    
    
    
    
    
    
    
    
    (33,404
    )
    
    
    (80,595
    )
    
    
    (23,294
    )
    
    
    (7,239
    )
    
    
    (11,639
    )
    
    
    (20,019
    )150,713
    
    
    
    327,415
    
    
    
    
    
    
    
    467,841
    
    
    
    
    
    
    
    9,267(6,681
    )
    
    
    (3,893
    )
    
    
    (6,067
    )
    
    
    
    
    
    
    
    
    
    
    46,120
    
    
    
    77,133
    
    
    
    (50,816
    )
    
    
    78,394
    
    
    
    786,790
    
    
    
    (1,589,622
    )
    
    
    
    
    
    
    
    
    
    
    
    (53,522
    )
    
    
    (15,501
    )
    
    
    (65,713
    )(125,359
    )
    
    
    119,296
    
    
    
    7,870
    
    
    
    (221,544
    )
    
    
    645,244
    
    
    
    363,360500,695
    
    
    
    972,028
    
    
    
    1,034,509
    
    
    
    
    
    
    
    
    
    
    
    (293,620
    )
    
    
    (343,322
    )
    
    
    (217,324
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    961,126
    
    
    
    2,008,372
    
    
    
    3,764,701
    
    
    
    
    
    
    
    
    
    
    
    (746,680
    )
    
    
    (3,366,188
    )
    
    
    (2,709,105
    )66,142
    
    
    
    58,971
    
    
    
    87,797
    
    
    
    
    
    
    
    
    
    
    
    (271,022
    )
    
    
    (648,638
    )
    
    
    (979
    )
    
    
    
    
    
    
    
    
    
    
    (19,095
    )
    
    
    (20,294
    )
    
    
    (19,947
    )
    
    
    (595,780
    )
    
    
    (72,747
    )
    
    
    (49,000
    )(142,259
    )
    
    
    138,041
    
    
    
    891,926
    
    
    
    (656,400
    )
    
    
    (800,820
    )
    
    
    1,304,243
    
    
    
    (1,479
    )
    
    
    (5,385
    )
    
    
    
    
    
    
    
    
    
    
    833,977
    
    
    
    (453,597
    )
    
    
    329,718
    
    
    
    822
    
    
    
    (1,034
    )
    
    
    (5,991
    )36,711
    
    
    
    490,308
    
    
    
    160,590
    
    
    
    11,244
    
    
    
    12,278
    
    
    
    18,269$
    870,688
    
    
    $
    36,711
    
    
    $
    490,308
    
    
    $
    12,066
    
    
    $
    11,244
    
    
    $
    12,278
 
 *
    
    In the supplemental data presented above, Centex represents the consolidation of all
subsidiaries other than those included in Financial Services as described in Note (A), Significant
Accounting Policies. Transactions between Centex and Financial Services have been eliminated from
the Centex Corporation and Subsidiaries statements of cash flows. 59




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##### Table of Contents



Centex Corporation and Subsidiaries
 
 Statements of Consolidated Stockholders Equity
 (in thousands)
 UnamortizedCapital in
    
    
    Value ofCommon Stock
    
    
    Excess of
    
    
    DeferredShares
    
    
    Amount
    
    
    Par Value
    
    
    CompensationBalance, March 31, 2004
    
    
    122,660
    
    
    $
    32,068
    
    
    $
    202,958
    
    
    $
    (411
    )Issuance of Restricted Stock and Stock Units
    
    
    149
    
    
    
    20
    
    
    
    (1,887
    )
    
    
    Stock Compensation
    
    
    
    
    
    
    
    
    
    
    48,886
    
    
    
    214Exercise of Stock Options, Including
Tax Benefits
    
    
    4,952
    
    
    
    1,239
    
    
    
    157,932
    
    
    
    Cash Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchases of Common Stock for Treasury
    
    
    (34
    )
    
    
    
    
    
    
    
    
    
    
    Other Stock Transactions
    
    
    2
    
    
    
    
    
    
    
    106
    
    
    
    Net Earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unrealized Gain on Hedging Instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Foreign Currency Translation Adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive IncomeBalance, March 31, 2005
    
    
    127,729
    
    
    
    33,327
    
    
    
    407,995
    
    
    
    (197
    )Issuance of Restricted Stock and Stock Units
    
    
    686
    
    
    
    62
    
    
    
    (12,436
    )
    
    
    Stock Compensation
    
    
    
    
    
    
    
    
    
    
    68,546
    
    
    
    197Exercise of Stock Options, Including
Tax Benefits
    
    
    2,970
    
    
    
    743
    
    
    
    115,690
    
    
    
    Cash Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchases of Common Stock for Treasury
    
    
    (9,285
    )
    
    
    
    
    
    
    
    
    
    
    Other Stock Transactions
    
    
    4
    
    
    
    
    
    
    
    215
    
    
    
    Net Earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unrealized Gain on Hedging Instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Foreign Currency Translation Adjustments (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive IncomeBalance, March 31, 2006
    
    
    122,104
    
    
    
    34,132
    
    
    
    580,010
    
    
    
    Issuance of Restricted Stock and Stock Units
    
    
    513
    
    
    
    30
    
    
    
    (29,366
    )
    
    
    Stock Compensation
    
    
    
    
    
    
    
    
    
    
    64,850
    
    
    
    Exercise of Stock Options, Including
Tax Benefits
    
    
    2,507
    
    
    
    627
    
    
    
    76,629
    
    
    
    Cash Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchases of Common Stock for Treasury
    
    
    (5,159
    )
    
    
    
    
    
    
    
    
    
    
    Retirement of Treasury Stock
    
    
    
    
    
    
    (3,750
    )
    
    
    (645,059
    )
    
    
    Other Stock Transactions
    
    
    5
    
    
    
    2
    
    
    
    1,285
    
    
    
    Net Earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unrealized Gain on Hedging Instruments(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Foreign Currency Translation
Adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive IncomeBalance, March 31, 2007
    
    
    119,970
    
    
    $
    31,041
    
    
    $
    48,349
    
    
    $
    
 See Notes to Consolidated Financial Statements.
 
 (1)
    
    Amount includes a reclassification adjustment of $48,354, net of tax, for foreign currency
translation adjustments included in earnings from discontinued operations.(2)
    
    Amount includes a reclassification adjustment of $15,738, net of tax, for hedging gain
included in earnings from discontinued operations. 60




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##### Table of Contents



Centex Corporation and Subsidiaries
Statements of Consolidated Stockholders Equity  (in thousands)
 AccumulatedTreasury
    
    
    OtherRetained
    
    
    Stock
    
    
    ComprehensiveEarnings
    
    
    at Cost
    
    
    Income (Loss)
    
    
    Total$
    2,990,889
    
    
    $
    (212,822
    )
    
    $
    37,543
    
    
    $
    3,050,225
    
    
    
    1,016
    
    
    
    
    
    
    
    (851
    )
    
    
    
    
    
    
    
    
    
    
    
    49,100
    
    
    
    
    
    
    
    
    
    
    
    159,171(19,947
    )
    
    
    
    
    
    
    
    
    
    
    (19,947
    )
    
    
    
    (1,995
    )
    
    
    
    
    
    
    (1,995
    )
    
    
    
    
    
    
    
    
    
    
    
    1061,011,364
    
    
    
    
    
    
    
    
    
    
    
    1,011,364
    
    
    
    
    
    
    
    24,615
    
    
    
    24,615
    
    
    
    
    
    
    
    8,969
    
    
    
    8,9691,044,9483,982,306
    
    
    
    (213,801
    )
    
    
    71,127
    
    
    
    4,280,757
    
    
    
    7,142
    
    
    
    
    
    
    
    (5,232
    )
    
    
    
    
    
    
    
    
    
    
    
    68,743
    
    
    
    
    
    
    
    
    
    
    
    116,433(20,294
    )
    
    
    
    
    
    
    
    
    
    
    (20,294
    )
    
    
    
    (655,780
    )
    
    
    
    
    
    
    (655,780
    )
    
    
    
    
    
    
    
    
    
    
    
    2151,289,313
    
    
    
    
    
    
    
    
    
    
    
    1,289,313
    
    
    
    
    
    
    
    263
    
    
    
    263
    
    
    
    
    
    
    
    (62,760
    )
    
    
    (62,760
    )1,226,8165,251,325
    
    
    
    (862,439
    )
    
    
    8,630
    
    
    
    5,011,658(1,926
    )
    
    
    18,861
    
    
    
    
    
    
    
    (12,401
    )
    
    
    
    
    
    
    
    
    
    
    
    64,850
    
    
    
    
    
    
    
    
    
    
    
    77,256(19,095
    )
    
    
    
    
    
    
    
    
    
    
    (19,095
    )
    
    
    
    (271,022
    )
    
    
    
    
    
    
    (271,022
    )(247,797
    )
    
    
    896,606
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,287268,366
    
    
    
    
    
    
    
    
    
    
    
    268,366
    
    
    
    
    
    
    
    (8,702
    )
    
    
    (8,702
    )
    
    
    
    
    
    
    
    72
    
    
    
    72259,736$
    5,250,873
    
    
    $
    (217,994
    )
    
    $
    
    
    
    $
    5,112,269
 61




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##### Table of Contents



Centex Corporation and Subsidiaries
 
 Notes to Consolidated Financial Statements
 (Dollars in thousands, except per share data)
 (A) SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation
   
    
    Centex Corporation and Subsidiaries.This represents the consolidation of Centex,
Financial Services and all of their consolidated subsidiaries, related companies and
certain variable interest entities. The effects of transactions among related
companies within the consolidated group have been eliminated.
    
    Centex.This information is presented as supplemental information and represents the
consolidation of all subsidiaries and certain variable interest entities other than
those included in Financial Services, which are presented on an equity basis of
accounting.
    
    Financial Services.This information is presented as supplemental information and
represents Centex Financial Services, its subsidiaries and related companies.
   Revenue Recognition
     62




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##### Table of Contents



Sales Discounts and Incentives
  Advertising Costs
  Interest Expense
  For the Years Ended March 31,2007
    
    
    2006
    
    
    2005Total Interest Incurred
    
    $
    482,401
    
    
    $
    674,351
    
    
    $
    480,310Less  Interest Capitalized
    
    
    (284,181
    )
    
    
    (227,246
    )
    
    
    (174,116
    )Financial Services Interest Expense
    
    
    (90,328
    )
    
    
    (65,904
    )
    
    
    (32,149
    )Discontinued Operations (1)
    
    
    (107,892
    )
    
    
    (369,134
    )
    
    
    (254,697
    )Interest Expense, net
    
    $
    
    
    
    $
    12,067
    
    
    $
    19,348Capitalized Interest Relieved to
Home Buildings Costs and Expenses
    
    $
    237,539
    
    
    $
    169,887
    
    
    $
    131,937
 
 (1)
    
    Includes Home Equity and International Home Building. Income Taxes
  Earnings Per Share
  63




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##### Table of Contents



For the Years Ended March 31,2007
    
    2006
    
    2005Average shares
    
    
    3,820
    
    
    
    1,515
    
    
    
    1,160Average option exercise price
    
    $
    20.41
    
    
    $
    57.37
    
    
    $
    45.23
 Cash and Cash Equivalents
  Restricted Cash
   Mortgage Loans
     64




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##### Table of Contents



Trade Accounts and Notes Receivable
  Housing Projects
   Land Held for Development and Sale
  Land Held Under Option Agreements Not Owned and Other Land Deposits
    65




---



##### Table of Contents



Investments in Joint Ventures
    Property and Equipment, net
  Impairment of Long-Lived Assets
  66




---



##### Table of Contents



Goodwill
  Deferred Charges and Other
  Off-Balance Sheet Obligations
  Insurance Accruals
  Stock-Based Employee Compensation Arrangements
  67




---



##### Table of Contents



Number ofShares
    
    Fair ValuePeriod of Grant
    
    Grant Type
    
    Granted
    
    of GrantFor the year ended March 31, 2006
    
    Stock Options
    
    
    1,716.2
    
    
    $
    39,301.2Stock Units
    
    
    556.6
    
    
    $
    31,926.9Restricted Stock
    
    
    249.4
    
    
    $
    14,551.1For the year ended March 31, 2007
    
    Stock Options
    
    
    1,420.3
    
    
    $
    28,603.0Stock Units
    
    
    366.2
    
    
    $
    19,955.4Restricted Stock
    
    
    121.2
    
    
    $
    6,379.9
  Statements of Consolidated Cash Flows  Supplemental Disclosures
   For the Years Ended March 31,2007
    
    
    2006
    
    
    2005Cash Paid for Interest
    
    $
    469,133
    
    
    $
    656,525
    
    
    $
    460,012Net Cash Paid for Taxes
    
    $
    325,224
    
    
    $
    772,153
    
    
    $
    366,411
  Recent Accounting Pronouncements
   68




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##### Table of Contents



Reclassifications
  (B) MORTGAGE LOANS
  As of March 31,2007
    
    
    2006Mortgage Loans Held for Sale
    
    $
    1,314,219
    
    
    $
    1,832,575Construction Loans
    
    
    379,910
    
    
    
    296,963Mortgage Loans Receivable
    
    $
    1,694,129
    
    
    $
    2,129,538
  69




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##### Table of Contents



(C) INVENTORIES
 Housing Projects and Land Held for Development and Sale
  As of March 31,2007
    
    
    2006Direct Construction
    
    $
    3,062,389
    
    
    $
    3,221,759Land Under Development
    
    
    5,433,593
    
    
    
    5,200,999Housing Projects
    
    $
    8,495,982
    
    
    $
    8,422,758
  Land Held Under Option Agreements Not Owned and Other Land Deposits
     As of March 31,2007
    
    
    2006Cash Deposits included in:Land Held for Development and Sale
    
    $
    89,737
    
    
    $
    232,676Land Held Under Option Agreements Not Owned
    
    
    38,642
    
    
    
    102,672Total Cash Deposits in Inventory
    
    
    128,379
    
    
    
    335,348Letters of Credit
    
    
    12,854
    
    
    
    28,949Total Invested through Deposits or
Secured with Letters of Credit
    
    $
    141,233
    
    
    $
    364,297Total Purchase Price of Land Option Agreements
    
    $
    3,324,636
    
    
    $
    9,930,154
  70




---



##### Table of Contents



(D) PROPERTY AND EQUIPMENT
  March 31,2007
    
    
    2006Land, Buildings and Improvements
    
    $
    79,717
    
    
    $
    115,870Machinery, Equipment and Other
    
    
    263,999
    
    
    
    231,584343,716
    
    
    
    347,454Accumulated Depreciation and Amortization
    
    
    (207,544
    )
    
    
    (169,446
    )$
    136,172
    
    
    $
    178,008
  (E) GOODWILL
  Home
    
    
    FinancialBuilding
    
    
    Services
    
    
 Other

    
    
    TotalBalance as of March 31, 2005
    
    $
    121,501
    
    
    $
    11,737
    
    
    $
    82,292
    
    
    $
    215,530Goodwill Acquired
    
    
    
    
    
    
    
    
    
    
    2,198
    
    
    
    2,198Balance as of March 31, 2006
    
    
    121,501
    
    
    
    11,737
    
    
    
    84,490
    
    
    
    217,728Goodwill Acquired
    
    
    
    
    
    
    
    
    
    
    4,940
    
    
    
    4,940Goodwill Disposed
    
    
    
    
    
    
    (2,785
    )
    
    
    (841
    )
    
    
    (3,626
    )Balance as of March 31, 2007
    
    $
    121,501
    
    
    $
    8,952
    
    
    $
    88,589
    
    
    $
    219,042
  East
    
    $
    27,945Southeast
    
    
    29,160Central
    
    
    8,505Texas
    
    
    9,720Northwest
    
    
    21,870Southwest
    
    
    24,301Other homebuilding
    
    
    $
    121,501
 
 71




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##### Table of Contents



(F) INDEBTEDNESS
  March 31,2007
    
    
    2006Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    AverageInterest
    
    
    
    
    
    
    InterestShort-term Debt:
    
    
    
    
    
    Rate
    
    
    
    
    
    
    RateCentex
    
    $
    1,807
    
    
    
    
    %
    
    $
    127,166
    
    
    
    5.09
    %Financial ServicesFinancial Institutions
    
    
    428,144
    
    
    
    5.56
    %
    
    
    324,986
    
    
    
    5.00
    %Harwood Street Funding I, LLC SecuredLiquidity Notes
    
    
    1,174,896
    
    
    
    5.38
    %
    
    
    1,692,229
    
    
    
    4.84
    %Consolidated Short-term Debt
    
    
    1,604,847
    
    
    
    
    
    
    
    2,144,381Long-term Debt:CentexMedium-term Note Programs, due through 2008
    
    
    170,000
    
    
    
    5.61
    %
    
    
    358,000
    
    
    
    6.01
    %Senior Notes, due through 2017
    
    
    3,708,976
    
    
    
    5.89
    %
    
    
    3,208,762
    
    
    
    5.79
    %Other Indebtedness, due through 2018
    
    
    23,642
    
    
    
    6.57
    %
    
    
    188,346
    
    
    
    9.17
    %Subordinated Debentures, due in 2007
    
    
    
    
    
    
    
    %
    
    
    99,919
    
    
    
    8.75
    %3,902,618
    
    
    
    
    
    
    
    3,855,027Financial ServicesHarwood Street Funding I, LLC Variable-RateSubordinated Extendable Certificates,
due through 2010
    
    
    60,000
    
    
    
    7.32
    %
    
    
    60,000
    
    
    
    6.83
    %Consolidated Long-term Debt
    
    
    3,962,618
    
    
    
    
    
    
    
    3,915,027Total Debt
    
    $
    5,567,465
    
    
    
    
    
    
    $
    6,059,408
  72




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##### Table of Contents



For the Years Ended March 31,2007
    
    2006
    
    2005Short-term DebtCentex
    
    
    5.35
    %
    
    
    4.23
    %
    
    
    2.05
    %Financial Services
    
    
    5.59
    %
    
    
    4.04
    %
    
    
    1.95
    %Long-term Debt:CentexMedium-term Note Programs
    
    
    6.00
    %
    
    
    5.54
    % (1)
    
    
    5.41
    % (1)Senior Notes
    
    
    5.89
    %
    
    
    5.90
    %
    
    
    6.47
    %Other Indebtedness
    
    
    6.07
    %
    
    
    5.44
    %
    
    
    5.22
    %Subordinated Debentures
    
    
    8.75
    %
    
    
    8.56
    %
    
    
    8.06
    %Financial ServicesHarwood Street Funding I,
LLC Variable-Rate
Subordinated
Extendable Certificates
    
    
    7.34
    %
    
    
    5.85
    %
    
    
    3.58
    %
 
 (1)
    
    Interest rates include the effects of an interest rate swap agreement.  FinancialCentex
    
    
    Services
    
    
    Total2008
    
    $
    526,783
    
    
    $
    
    
    
    $
    526,7832009
    
    
    150,670
    
    
    
    
    
    
    
    150,6702010
    
    
    225,222
    
    
    
    60,000
    
    
    
    285,2222011
    
    
    700,222
    
    
    
    
    
    
    
    700,2222012
    
    
    349,231
    
    
    
    
    
    
    
    349,231Thereafter
    
    
    1,950,490
    
    
    
    
    
    
    
    1,950,490$
    3,902,618
    
    
    $
    60,000
    
    
    $
    3,962,618
  73




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##### Table of Contents



Credit Facilities
  Existing CreditFacilities
    
    
    Available CapacityCentexMulti-Bank Revolving Credit FacilityRevolving Credit
    
    $
    1,250,000
    
    
    $
    1,250,000Letters of Credit
    
    
    835,000
    
    
    
    493,1472,085,000
    
    
    
    1,743,147
    (1) (2)Financial ServicesSecured Credit Facilities
    
    
    440,000
    
    
    
    328,856
    (3)Mortgage Conduit Facilities
    
    
    650,000
    
    
    
    333,000
    (4)Harwood Street Funding I, LLC Facility
    
    
    3,000,000
    
    
    
    1,762,4824,090,000
    
    
    
    2,424,338$
    6,175,000
    
    
    $
    4,167,485
 
 (1)
    
    This is an unsecured, committed, multi-bank revolving credit facility, maturing in July
2010, which serves as backup for Centex Corporations $1.25 billion commercial paper program
and provides $835 million of letter of credit capacity. As of March 31, 2007, the $1.25
billion commercial paper program had no amounts outstanding. There have been no direct
borrowings under this revolving credit facility since its inception.(2)
    
    Centex maintains a minimum of $100 million in unused committed credit at all times in
conjunction with certain remaining surety bond obligations relating to Construction Services
projects commenced prior to the sale of Construction Services on March 30, 2007. Following
the sale of Construction Services, the purchaser is subject to an AA- (S&P), Aa3 (Moodys)
back-up indemnity, which indemnifies Centex Corporation against any loss under any such letter of credit.(3)
    
    CTX Mortgage Company, LLC maintains $440 million of secured, committed mortgage warehouse
facilities.(4)
    
    A wholly-owned limited purpose subsidiary of CTX Mortgage Company, LLC maintains secured,
committed facilities funded through commercial paper conduits to finance the purchase of
certain mortgage loans from CTX Mortgage Company, LLC. CTX Mortgage Company, LLC and Harwood Street Funding I, LLC
    74




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##### Table of Contents



(G) COMMITMENTS AND CONTINGENCIES
 Joint Ventures
  75




---



##### Table of Contents



As of March 31,2007
    
    
    2006Number of Active Joint Ventures (1)
    
    
    49
    
    
    
    44Investment in Joint Ventures
    
    $
    281,644
    
    
    $
    307,756Total Joint Venture Debt (2)
    
    $
    1,000,599
    
    
    $
    1,053,201Centexs Share of Joint Venture Debt:Based on Centexs Ownership Percentage
    
    $
    412,397
    
    
    $
    388,428Based on Limited Recourse Provisions:Limited Maintenance Guarantee (3) (5)
    
    $
    162,425
    
    
    $
    228,603Repayment Guarantee (4) (5)
    
    
    12,055
    
    
    
    8,136Total Limited Recourse Debt
    
    $
    174,480
    
    
    $
    236,739
 
 (1)
    
    The number of active joint ventures includes unconsolidated Home Building joint
ventures for which the Company has an investment balance as of the end of the period
and/or current fiscal year activity. The Company is the managing member of 28 and 24 of
the active joint ventures as of March 31, 2007 and March 31, 2006, respectively.(2)
    
    As of March 31, 2007 and March 31, 2006, 21 and 23, respectively, of the active
joint ventures have outstanding debt.(3)
    
    The Company has guaranteed that certain of the joint ventures will maintain a
specified loan to value ratio. For certain joint ventures, the Company has contributed
additional capital in order to maintain loan to value requirements.(4)
    
    The Company has guaranteed repayment of a portion of certain joint venture debt
limited to its ownership percentage of the joint venture or a percentage thereof.(5)
    
    These amounts represent the Companys maximum exposure related to the joint
ventures debt at each respective date.  Letters of Credit and Surety Bonds
  76




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##### Table of Contents



As of March 31, 2007
    
    
    As of March 31, 2006Letters of Credit
    
    
    Surety Bonds
    
    
    Letters of Credit
    
    
    Surety BondsHome Building
    
    $
    209.1
    
    
    $
    1,542.3
    (1)
    
    $
    258.5
    
    
    $
    1,342.0Financial Services
    
    
    0.7
    
    
    
    10.7
    
    
    
    0.7
    
    
    
    9.9Other
    
    
    94.4
    
    
    
    1.7
    
    
    
    92.2
    
    
    
    0.1Discontinued Operations
    
    
    38.1
    
    
    
    4,161.8
    (2)
    
    
    37.3
    
    
    
    4,398.7$
    342.3
    
    
    $
    5,716.5
    
    
    $
    388.7
    
    
    $
    5,750.7
 
 (1)
    
    The Company estimates that $639.6 million of work remains to be performed on these
projects.(2)
    
    After the sale of Construction Services, the Company remains responsible for
certain surety bond obligations relating to Construction Services projects commenced prior to
March 30, 2007. These surety bonds have a total face amount of $4.16 billion, although the
risk of liability with respect to these surety bonds has declined as the relevant construction
projects are performed. The Company estimates that $1.71 billion of work remains to be
performed on these projects. In connection with certain of these surety bond obligations, the
Company has agreed to provide certain sureties with letters of credit of up to $100 million if
its public debt ratings fall below investment grade. The purchaser of Construction Services
has agreed to indemnify Centex against losses relating to such surety bond obligations,
including amounts drawn under any such letters of credit. The Company
has purchased for its benefit an additional
back-up indemnity provided by a financial institution with an AA- (S&P), Aa3 (Moodys) credit
rating. The obligation of such financial institution under the back-up indemnity is initially
subject to a limit of $2 billion, which declines to $400 million over time and terminates in
2016. Community Development and Other Special District Obligations
  Warranties and Guarantees
   77




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##### Table of Contents



For the Years Ended March 31,2007
    
    
    2006
    
    
    2005Balance at Beginning of Period
    
    $
    47,199
    
    
    $
    34,961
    
    
    $
    16,683Warranties Issued
    
    
    42,422
    
    
    
    53,036
    
    
    
    49,348Settlements Made
    
    
    (45,228
    )
    
    
    (40,173
    )
    
    
    (31,070
    )Change in Liability of
Pre-Existing Warranties,
Including Expirations
    
    
    (100
    )
    
    
    (625
    )
    
    
    Balance at End of Period
    
    $
    44,293
    
    
    $
    47,199
    
    
    $
    34,961
  For the Years Ended March 31,2007
    
    
    2006
    
    
    2005Balance at Beginning of Period
    
    $
    18,500
    
    
    $
    18,803
    
    
    $
    25,045Provisions for Losses
    
    
    5,575
    
    
    
    2,522
    
    
    
    1,958Settlements
    
    
    (3,034
    )
    
    
    (2,921
    )
    
    
    (6,799
    )Changes in Pre-Existing Reserves
    
    
    1,648
    
    
    
    (96
    )
    
    
    (1,401
    )Balance at End of Period
    
    $
    22,689
    
    
    $
    18,500
    
    
    $
    18,803
 Forward Trade and Interest Rate Lock Commitments
    Litigation and Related Matters
   78




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##### Table of Contents



(H) COMPREHENSIVE INCOME
  For the Years Ended March 31,2007
    
    
    2006
    
    
    2005Net Earnings
    
    $
    268,366
    
    
    $
    1,289,313
    
    
    $
    1,011,364Other Comprehensive Income (Loss), net of Tax:Unrealized Gain on Hedging Instruments
    
    
    7,036
    
    
    
    263
    
    
    
    24,615Foreign Currency Translation Adjustments
    
    
    72
    
    
    
    (14,406
    )
    
    
    8,969Hedging Gain, net of Tax, Reclassified to Net Earnings
    
    
    (15,738
    )
    
    
    
    
    
    
    Foreign Currency Gain, net of Tax, Reclassified to
Net Earnings
    
    
    
    
    
    
    (48,354
    )
    
    
    Comprehensive Income
    
    $
    259,736
    
    
    $
    1,226,816
    
    
    $
    1,044,948
  (I) BUSINESS SEGMENTS
  79




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##### Table of Contents



East:
 Southeast:
 Central:
 Texas:
 Northwest:
 Southwest:
 Other homebuilding (1)
 
 (1)
    
    Other homebuilding includes projects that the Company plans to build-out and
liquidate, ancillary businesses (including framing, carpet and holding companies)
conducting business in the following states: Florida, North Carolina, New Hampshire
and Texas. In addition, Other homebuilding includes amounts consolidated under the
caption land held under option agreements not owned and capitalized interest for all
regions.    Home Building
  Financial Services
  Other
  80




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##### Table of Contents



For the Years Ended March 31,2007
    
    
    2006
    
    
    2005Operating Loss from Home Services Operations
    
    $
    (4,013
    )
    
    $
    (7,498
    )
    
    $
    (15,856
    )Operating Earnings from Investment Real Estate Operations
    
    
    2,488
    
    
    
    1,719
    
    
    
    21,422Corporate General and Administrative Expense
    
    
    (185,585
    )
    
    
    (279,172
    )
    
    
    (249,360
    )Interest Expense
    
    
    
    
    
    
    (12,067
    )
    
    
    (19,348
    )$
    (187,110
    )
    
    $
    (297,018
    )
    
    $
    (263,142
    )
 For the Year Ended March 31, 2007(Dollars in thousands)Earnings
    
    
    Earnings (Loss)(Loss)
    
    
    fromfrom
    
    
    ContinuingUnconsolidated
    
    
    OperationsEntities and
    
    
    Before IncomeRevenues
    
    
    Other
    
    
    Tax
    
    
    Impairments
    
    
    Write-offsHome BuildingEast
    
    $
    2,255,702
    
    
    $
    2,859
    
    
    $
    151,821
    
    
    $
    63,023
    
    
    $
    58,886Southeast
    
    
    1,686,003
    
    
    
    9,481
    
    
    
    108,902
    
    
    
    51,321
    
    
    
    30,286Central
    
    
    1,048,883
    
    
    
    2,681
    
    
    
    (54,231
    )
    
    
    30,440
    
    
    
    39,105Texas
    
    
    1,154,702
    
    
    
    670
    
    
    
    93,209
    
    
    
    3,502
    
    
    
    522Northwest
    
    
    2,121,669
    
    
    
    (20,067
    )
    
    
    112,824
    
    
    
    61,119
    
    
    
    66,845Southwest
    
    
    2,730,392
    
    
    
    (44,560
    )
    
    
    (179,995
    )
    
    
    104,296
    
    
    
    162,165Other homebuilding
    
    
    417,476
    
    
    
    6,383
    
    
    
    (27,177
    )
    
    
    10,212
    
    
    
    2,190Total Home Building
    
    
    11,414,827
    
    
    
    (42,553
    )
    
    
    205,353
    
    
    
    323,913
    
    
    
    359,999Financial Services
    
    
    468,001
    
    
    
    
    
    
    
    84,530
    
    
    
    6,919
    
    
    
    Corporate & Other
    
    
    131,739
    
    
    
    
    
    
    
    (187,110
    )
    
    
    
    
    
    
    Total
    
    $
    12,014,567
    
    
    $
    (42,553
    )
    
    $
    102,773
    
    
    $
    330,832
    
    
    $
    359,999
 For the Year Ended March 31, 2006(Dollars in thousands)Earnings
    
    
    Earnings (Loss)(Loss)
    
    
    fromfrom
    
    
    ContinuingUnconsolidated
    
    
    OperationsEntities and
    
    
    Before IncomeRevenues
    
    
    Other
    
    
    Tax
    
    
    Impairments
    
    
    Write-offsHome BuildingEast
    
    $
    2,444,433
    
    
    $
    7,983
    
    
    $
    449,587
    
    
    $
    
    
    
    $
    7,217Southeast
    
    
    1,983,837
    
    
    
    4,522
    
    
    
    373,908
    
    
    
    
    
    
    
    3,544Central
    
    
    1,310,039
    
    
    
    1,731
    
    
    
    87,477
    
    
    
    
    
    
    
    5,190Texas
    
    
    1,063,379
    
    
    
    971
    
    
    
    85,284
    
    
    
    
    
    
    
    506Northwest
    
    
    2,143,852
    
    
    
    62,337
    
    
    
    496,764
    
    
    
    
    
    
    
    8,175Southwest
    
    
    2,841,081
    
    
    
    11,843
    
    
    
    521,324
    
    
    
    
    
    
    
    9,627Other homebuilding
    
    
    485,582
    
    
    
    (3,389
    )
    
    
    70,485
    
    
    
    
    
    
    
    896Total Home Building
    
    
    12,272,203
    
    
    
    85,998
    
    
    
    2,084,829
    
    
    
    
    
    
    
    35,155Financial Services
    
    
    462,223
    
    
    
    
    
    
    
    84,465
    
    
    
    
    
    
    
    Corporate & Other
    
    
    117,438
    
    
    
    
    
    
    
    (297,018
    )
    
    
    
    
    
    
    Total
    
    $
    12,851,864
    
    
    $
    85,998
    
    
    $
    1,872,276
    
    
    $
    
    
    
    $
    35,155
 81




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##### Table of Contents



For the Year Ended March 31, 2005(Dollars in thousands)Earnings (Loss)Earnings
    
    
    fromfrom
    
    
    ContinuingUnconsolidated
    
    
    OperationsEntities and
    
    
    Before IncomeRevenues
    
    
    Other
    
    
    Tax
    
    
    Impairments
    
    
    Write-offsHome BuildingEast
    
    $
    1,767,299
    
    
    $
    8,490
    
    
    $
    309,673
    
    
    $
    
    
    
    $
    2,057Southeast
    
    
    1,359,364
    
    
    
    1,639
    
    
    
    217,921
    
    
    
    
    
    
    
    1,649Central
    
    
    1,221,526
    
    
    
    1,443
    
    
    
    126,678
    
    
    
    
    
    
    
    1,202Texas
    
    
    877,270
    
    
    
    711
    
    
    
    68,996
    
    
    
    
    
    
    
    1,561Northwest
    
    
    1,529,474
    
    
    
    54,184
    
    
    
    339,993
    
    
    
    
    
    
    
    2,987Southwest
    
    
    2,206,688
    
    
    
    1,041
    
    
    
    439,882
    
    
    
    
    
    
    
    6,357Other homebuilding
    
    
    398,120
    
    
    
    1,278
    
    
    
    42,158
    
    
    
    
    
    
    
    517Total Home Building
    
    
    9,359,741
    
    
    
    68,786
    
    
    
    1,545,301
    
    
    
    
    
    
    
    16,330Financial Services
    
    
    421,653
    
    
    
    
    
    
    
    95,972
    
    
    
    
    
    
    
    Corporate & Other
    
    
    152,888
    
    
    
    
    
    
    
    (263,142
    )
    
    
    
    
    
    
    Total
    
    $
    9,934,282
    
    
    $
    68,786
    
    
    $
    1,378,131
    
    
    $
    
    
    
    $
    16,330
 For the Years Ended March 31,(Dollars in thousands)2007
    
    
    2006Inventory
    
    
    Total Assets
    
    
    Inventory
    
    
    Total AssetsHome BuildingEast
    
    $
    1,477,904
    
    
    $
    1,663,815
    
    
    $
    1,563,928
    
    
    $
    1,734,864Southeast
    
    
    1,703,614
    
    
    
    1,821,660
    
    
    
    1,489,549
    
    
    
    1,643,459Central
    
    
    606,508
    
    
    
    652,799
    
    
    
    737,665
    
    
    
    779,933Texas
    
    
    605,200
    
    
    
    630,396
    
    
    
    581,312
    
    
    
    596,512Northwest
    
    
    1,725,847
    
    
    
    1,829,961
    
    
    
    1,696,121
    
    
    
    1,821,314Southwest
    
    
    2,112,369
    
    
    
    2,304,415
    
    
    
    2,389,563
    
    
    
    2,613,515Other homebuilding
    
    
    704,868
    
    
    
    1,212,444
    
    
    
    1,191,796
    
    
    
    1,632,276Total Home Building
    
    
    8,936,310
    
    
    
    10,115,490
    
    
    
    9,649,934
    
    
    
    10,821,873Financial Services
    
    
    8,747
    
    
    
    1,920,908
    
    
    
    6,254
    
    
    
    2,327,267Corporate & Other
    
    
    6,022
    
    
    
    1,169,361
    
    
    
    5,361
    
    
    
    316,718Total
    
    $
    8,951,079
    
    
    $
    13,205,759
    
    
    $
    9,661,549
    
    
    $
    13,465,858
 (J) INCOME TAXES
  For the Years Ended March 31,2007
    
    
    2006
    
    
    2005Current ProvisionFederal
    
    $
    317,597
    
    
    $
    615,642
    
    
    $
    489,653State
    
    
    45,612
    
    
    
    97,381
    
    
    
    80,707363,209
    
    
    
    713,023
    
    
    
    570,360Deferred Provision (Benefit)Federal
    
    
    (216,607
    )
    
    
    (35,685
    )
    
    
    (53,437
    )State
    
    
    (32,049
    )
    
    
    (12,151
    )
    
    
    (24,600
    )(248,656
    )
    
    
    (47,836
    )
    
    
    (78,037
    )Provision for Income Taxes
    
    $
    114,553
    
    
    $
    665,187
    
    
    $
    492,323
 82




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##### Table of Contents



For the Years Ended March 31,2007
    
    
    2006
    
    
    2005Earnings from Continuing Operations Before
Income Taxes
    
    $
    102,773
    
    
    $
    1,872,276
    
    
    $
    1,378,131Income Taxes at Statutory Rate
    
    $
    35,970
    
    
    $
    655,297
    
    
    $
    482,349Increases (Decreases) in Tax Resulting from -State Income Taxes, net
    
    
    8,819
    
    
    
    54,968
    
    
    
    35,995U.S. Government Tax Refund
    
    
    
    
    
    
    (28,101
    )
    
    
    Change in Valuation Allowance
    
    
    
    
    
    
    
    
    
    
    (39,278
    )Change in Reserve for Tax Contingencies
    
    
    65,480
    
    
    
    (5,860
    )
    
    
    19,435Other
    
    
    4,284
    
    
    
    (11,117
    )
    
    
    (6,178
    )Provision for Income Taxes
    
    $
    114,553
    
    
    $
    665,187
    
    
    $
    492,323Effective Tax Rate
    
    
    111
    %
    
    
    36
    %
    
    
    36
    %
  As of March 31,2007
    
    
    2006Deferred Tax AssetsDeferred Compensation
    
    $
    71,326
    
    
    $
    55,950Land Impairments and Option Write-offs
    
    
    136,569
    
    
    
    9,837Uniform Capitalization for Tax Reporting
    
    
    58,452
    
    
    
    59,961Accrued Liabilities
    
    
    172,552
    
    
    
    120,948Partnership Reporting Differences
    
    
    70,960
    
    
    
    19,486All Other
    
    
    4,752
    
    
    
    4,672Total Deferred Tax Assets
    
    
    514,611
    
    
    
    270,854Deferred Tax LiabilitiesExcess Tax Depreciation and Amortization
    
    
    23,825
    
    
    
    25,617Installment Sale Reporting
    
    
    
    
    
    
    3,820All Other
    
    
    972
    
    
    
    4,396Total Deferred Tax Liabilities
    
    
    24,797
    
    
    
    33,833Net Deferred Tax Assets
    
    $
    489,814
    
    
    $
    237,021
    83




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##### Table of Contents



(K) CAPITAL STOCK AND EMPLOYEE BENEFIT PLANS
 Stockholder Rights Plan
  Stock Options
     For the Year Ended March 31, 2007Weighted-Weighted-
    
    
    AverageAverage
    
    
    RemainingNumber of
    
    
    Exercise
    
    
    Contractual
    
    
    AggregateShares
    
    
    Price
    
    
    Life (Years)
    
    
    Intrinsic ValueOptions Outstanding, Beginning of Year
    
    
    12,361,056
    
    
    $
    28.49Options Granted at Fair Market Value
    
    
    1,470,049
    
    
    $
    40.77Options Exercised
    
    
    (2,507,870
    )
    
    $
    25.03Options Cancelled
    
    
    (549,451
    )
    
    $
    54.65Options Outstanding, End of Year
    
    
    10,773,784
    
    
    $
    31.45
    
    
    
    2.8
    
    
    $
    111,293Options Exercisable, End of Year
    
    
    9,475,817
    
    
    $
    28.25
    
    
    
    2.5
    
    
    $
    128,208Shares Available for Future Stock Option
Grants, End of Year
    
    
    2,912,055Weighted-Average Fair Value of Options
Granted During the Year
    
    $
    20.14
 84




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##### Table of Contents



For the Years Ended March 31,2006
    
    
    2005Weighted-
    
    
    
    
    
    
    Weighted-Number
    
    
    Average
    
    
    Number
    
    
    Averageof
    
    
    Exercise
    
    
    of
    
    
    ExerciseShares
    
    
    Price
    
    
    Shares
    
    
    PriceOptions Outstanding, Beginning of Year
    
    
    14,042,776
    
    
    $
    23.22
    
    
    
    17,197,357
    
    
    $
    19.09Options Granted at Fair Market Value
    
    
    1,716,209
    
    
    $
    57.36
    
    
    
    1,828,230
    
    
    $
    45.30Options Exercised
    
    
    (3,290,472
    )
    
    $
    20.59
    
    
    
    (4,952,134
    )
    
    $
    17.00Options Cancelled
    
    
    (107,457
    )
    
    $
    42.04
    
    
    
    (30,677
    )
    
    $
    28.17Options Outstanding, End of Year
    
    
    12,361,056
    
    
    $
    28.49
    
    
    
    14,042,776
    
    
    $
    23.22Options Exercisable, End of Year
    
    
    10,620,005
    
    
    $
    24.57
    
    
    
    11,121,137Shares Available for Future Stock
Option Grants, End of Year
    
    
    4,035,310
    
    
    
    
    
    
    
    6,365,554Weighted-Average Fair Value of Options
Granted During the Year
    
    $
    22.90
    
    
    
    
    
    
    $
    17.25
   As of March 31, 2007Weighted-AverageGrant-DateNonvested Shares
    
    Shares
    
    Fair ValueNonvested at March 31, 2006
    
    
    855,810
    
    
    $
    51.52Granted
    
    
    487,395
    
    
    $
    54.03Vested
    
    
    (722,945
    )
    
    $
    50.31Forfeited
    
    
    (104,120
    )
    
    $
    54.80Nonvested at March 31, 2007
    
    
    516,140
    
    
    $
    55.47
   For the Years Ended March 31,2007
    
    2006
    
    2005All Others
    
    DirectorsExpected Volatility
    
    
    36.7
    %
    
    
    38.8
    %
    
    
    41.8
    %
    
    
    44.2
    %Risk-Free Interest Rate
    
    
    5.0
    %
    
    
    4.8
    %
    
    
    3.8
    %
    
    
    3.7
    %Dividend Yield
    
    
    0.3
    %
    
    
    0.3
    %
    
    
    0.3
    %
    
    
    0.4
    %Expected Life (Years)
    
    
    4.5
    
    
    
    5.4
    
    
    
    4.7
    
    
    
    4.0
 85




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##### Table of Contents



(c)Number of securities(a)
    
    
    
    
    
    remaining available forNumber of securities
    
    (b)
    
    future issuance underto be issued upon
    
    Weighted-average
    
    equity compensationexercise of
    
    exercise price of
    
    plans [excludingoutstanding options,
    
    outstanding options,
    
    securities reflected inPlan Category
    
    Plan
    
    warrants and rights
    
    warrants and rights
    
    column (a)]Equity Compensation Plans
    
    1987
    
    
    2,341,728
    
    
    $
    15.37
    
    
    
    Approved by
    
    2001
    
    
    2,103,824
    
    
    $
    43.12
    
    
    
    175,135Stockholders
    
    2003
    
    
    2,041,118
    
    
    $
    53.02
    
    
    
    2,736,920Equity Compensation Plans
    
    1998
    
    
    4,287,114
    
    
    $
    24.22
    
    
    
    not Approved by
    
    Long TermStockholders
    
    Incentive Plan
    
    
    1,312,234
    
    
    $
    
    
    
    
    138,058Total
    
    
    
    
    12,086,018
    
    
    $
    31.45
    (1)
    
    
    3,050,113
 
 (1)
    
    Weighted-average exercise price excludes any items with an exercise price of $0.  Employee Benefit Plans
  (L) DERIVATIVES AND HEDGING
  Fair Value Hedges
  86




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##### Table of Contents



Other Derivatives
    (M) FAIR VALUE OF FINANCIAL INSTRUMENTS
   March 31,2007
    
    
    2006Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairValue
    
    
    Value
    
    
    Value
    
    
    ValueFinancial AssetsMortgage Loans Receivable
    
    $
    1,694,129
    
    
    $
    1,695,182
    (1)
    
    $
    2,129,538
    
    
    $
    2,132,286
    (1)Financial LiabilitiesCentex Long-term Debt
    
    $
    3,902,618
    
    
    $
    3,849,083
    (2)
    
    $
    3,855,027
    
    
    $
    3,847,383
    (2)Financial Services Long-term Debt
    
    $
    60,000
    
    
    $
    58,688
    (2)
    
    $
    60,000
    
    
    $
    60,093
    (2)
 
 (1)
    
    Fair values are based on quoted market prices for similar instruments.(2)
    
    Fair values are based on a present value discounted cash flow with the discount rate
approximating current market for similar instruments. (N) OFF-BALANCE SHEET OBLIGATIONS
  (O) DISCONTINUED OPERATIONS
  87




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##### Table of Contents



International Home Building
  Sales Proceeds
    
    $
    318,717Assets Sold
    
    
    (632,956
    )Liabilities Assumed by Buyer
    
    
    118,951Long-term Debt Assumed by Buyer
    
    
    153,434Cumulative Foreign Currency Gain
    
    
    48,354Pre-tax Gain on Sale
    
    
    6,500Income Tax Expense
    
    
    (15,660
    )Net Loss on Sale
    
    $
    (9,160
    )
 Home Equity
    Sales and Related Proceeds, net of Related Expenses
    
    $
    518,500Assets Sold
    
    
    (400,706
    )Intercompany Liability Paid by Buyer
    
    
    (11,795
    )Deferred Income
    
    
    (6,100
    )Hedging Gain
    
    
    25,466Pre-tax Gain on Sale
    
    
    125,365Income Tax Expense
    
    
    (50,390
    )Net Gain on Sale
    
    $
    74,975
 88




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##### Table of Contents



Construction Services
    Sales and Related Proceeds, net of Related Expenses
    
    $
    344,752Assets Sold
    
    
    Pre-tax Gain on Sale
    
    
    344,752Income Tax Expense
    
    
    (131,695
    )Net Gain on Sale
    
    $
    213,057
 89




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##### Table of Contents



Summarized Financial Information
  As of March 31,2007
    
    
    2006 (1)AssetsCash and Cash Equivalents
    
    $
    
    
    
    $
    4,605Restricted Cash
    
    
    
    
    
    
    279,210Mortgage Loans Held for Investment
    
    
    
    
    
    
    6,867,658Construction Contracts
    
    
    
    
    
    
    361,393Receivables
    
    
    
    
    
    
    169,793Investments in Joint Ventures
    
    
    
    
    
    
    2,628Property and Equipment, net
    
    
    
    
    
    
    22,489Deferred Income Taxes
    
    
    
    
    
    
    71,043Goodwill
    
    
    
    
    
    
    1,007Mortgage Securitization Residual Interest
    
    
    
    
    
    
    56,831Deferred Charges and Other, net
    
    
    
    
    
    
    62,484$
    
    
    
    $
    7,899,141LiabilitiesAccounts Payable and Accrued Liabilities
    
    $
    
    
    
    $
    647,807Notes Payable
    
    
    
    
    
    
    1,095,905Long-term Debt
    
    
    
    
    
    
    5,835,454Minority Interests
    
    
    
    
    
    
    1,527$
    
    
    
    $
    7,580,693
 For the Years Ended March 31,2007(1)
    
    
    2006 (2)
    
    
    2005 (2)Revenues
    
    $
    2,278,181
    
    
    $
    2,606,746
    
    
    $
    2,925,413Costs and Expenses
    
    
    (2,296,394
    )
    
    
    (2,451,294
    )
    
    
    (2,731,803
    )Earnings from Unconsolidated Entities and Other
    
    
    975
    
    
    
    1,174
    
    
    
    2,028Earnings (Loss) Before Income Taxes
    
    
    (17,238
    )
    
    
    156,626
    
    
    
    195,638Benefit (Provision) for Income Taxes
    
    
    9,352
    
    
    
    (65,242
    )
    
    
    (70,082
    )Gain (Loss) on Sale, net of Tax
    
    
    288,032
    
    
    
    (9,160
    )
    
    
    $
    280,146
    
    
    $
    82,224
    
    
    $
    125,556
 
 (1)
    
    Includes Construction Services and Home Equity.(2)
    
    Includes Construction Services, Home Equity and International Home Building. Significant Accounting Policies Related to Discontinued Operations
 Mortgage Loans Held for Investment
  90




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##### Table of Contents



For the Years Ended March 31,2006
    
    
    2005Balance at Beginning of Period
    
    $
    85,302
    
    
    $
    56,358Provision for Losses
    
    
    94,319
    
    
    
    98,801Losses Sustained, net of Recoveries of $1,499 and $1,226
    
    
    (80,245
    )
    
    
    (69,857
    )Balance at End of Period
    
    $
    99,376
    
    
    $
    85,302Allowance as a Percentage of Gross Loans Held
for Investment
    
    
    1.4
    %
    
    
    1.1
    %Allowance as a Percentage of 90+ Days
Contractual Delinquency
    
    
    41.0
    %
    
    
    44.2
    %90+ Days Contractual Delinquency (based on months)Total Dollars Delinquent
    
    $
    242,241
    
    
    $
    192,835% Delinquent
    
    
    3.5
    %
    
    
    2.4
    %
 Revenue Recognition  Construction Services
   91




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF CENTEX CORPORATION AND SUBSIDIARIES:
      
 
 
 92




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##### Table of Contents



Managements Report on Internal Control Over Financial Reporting
   93




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF CENTEX CORPORATION AND SUBSIDIARIES
       
   94




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##### Table of Contents



Quarterly
Results (Unaudited) (1)  (Dollars in thousands, except per share data)
 For the Quarters Ended 2007 and 2006Q1
    
    
    Q2
    
    
    Q3
    
    
    Q42007Revenues
    
    $
    2,803,900
    
    
    $
    2,815,588
    
    
    $
    2,726,216
    
    
    $
    3,668,863Gross Profit (Loss)
    
    $
    267,795
    
    
    $
    132,148
    
    
    $
    (253,403
    )
    
    $
    (1,214
    )Earnings (Loss) from Continuing
Operations
    
    $
    172,428
    
    
    $
    80,422
    
    
    $
    (242,345
    )
    
    $
    (22,285
    )Earnings (Loss) from Discontinued
Operations, net of Taxes
    
    
    (12,171
    )
    
    
    56,978
    
    
    
    14,199
    
    
    
    221,140Net Earnings (Loss)
    
    $
    160,257
    
    
    $
    137,400
    
    
    $
    (228,146
    )
    
    $
    198,855Earnings (Loss) from Continuing
Operations Per ShareBasic
    
    $
    1.41
    
    
    $
    0.67
    
    
    $
    (2.02
    )
    
    $
    (0.18
    )Diluted
    
    $
    1.37
    
    
    $
    0.65
    
    
    $
    (2.02
    )
    
    $
    (0.18
    )Net Earnings (Loss) Per ShareBasic
    
    $
    1.31
    
    
    $
    1.15
    
    
    $
    (1.90
    )
    
    $
    1.65Diluted
    
    $
    1.27
    
    
    $
    1.11
    
    
    $
    (1.90
    )
    
    $
    1.65Average Shares OutstandingBasic
    
    
    121,969,085
    
    
    
    119,634,303
    
    
    
    119,935,522
    
    
    
    120,627,559Diluted
    
    
    126,233,469
    
    
    
    123,504,535
    
    
    
    119,935,522
    
    
    
    120,627,5592006Revenues
    
    $
    2,536,875
    
    
    $
    3,039,353
    
    
    $
    3,145,507
    
    
    $
    4,130,129Gross Profit
    
    $
    323,891
    
    
    $
    444,713
    
    
    $
    445,680
    
    
    $
    571,994Earnings from Continuing Operations
    
    $
    209,264
    
    
    $
    318,901
    
    
    $
    309,964
    
    
    $
    368,960Earnings from Discontinued Operations,
net of Taxes
    
    
    24,406
    
    
    
    15,629
    
    
    
    19,380
    
    
    
    22,809Net Earnings
    
    $
    233,670
    
    
    $
    334,530
    
    
    $
    329,344
    
    
    $
    391,769Earnings from Continuing Operations
Per ShareBasic
    
    $
    1.63
    
    
    $
    2.48
    
    
    $
    2.45
    
    
    $
    2.99Diluted
    
    $
    1.56
    
    
    $
    2.37
    
    
    $
    2.35
    
    
    $
    2.86Net Earnings Per ShareBasic
    
    $
    1.82
    
    
    $
    2.60
    
    
    $
    2.60
    
    
    $
    3.17Diluted
    
    $
    1.74
    
    
    $
    2.49
    
    
    $
    2.49
    
    
    $
    3.04Average Shares OutstandingBasic
    
    
    128,672,028
    
    
    
    128,565,026
    
    
    
    126,572,663
    
    
    
    123,622,796Diluted
    
    
    134,584,442
    
    
    
    134,526,936
    
    
    
    132,077,763
    
    
    
    128,732,705
 
 (1)
    
    The quarterly results presented in this table for the periods covered by the financial
statements included in this Report and all prior periods have been adjusted to reflect
Construction Services (sold in March 2007), Home Equity (sold in July 2006) and International
Homebuilding (sold in September 2005) as discontinued operations. 95




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##### Table of Contents



ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A .
    
    CONTROLS AND PROCEDURES
   
 ITEM 9B .
    
    OTHER INFORMATION
  
 PART III
 
 ITEM 10 .
    
    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
     
 ITEM 11.
    
    EXECUTIVE COMPENSATION
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
  96




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##### Table of Contents



ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
  
 ITEM 14.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
  
 PART IV
 
 ITEM 15.
    
    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
  1.
    
    Financial StatementsThe consolidated balance sheets of Centex Corporation and subsidiaries as of March
31, 2007 and 2006, and the related consolidated statements of earnings,
stockholders equity and cash flows for each of the three years in the period ended
March 31, 2007, together with the accompanying Notes to Consolidated Financial
Statements and the Reports of Independent Registered Public Accounting Firm of this
Report.2.
    
    SchedulesSchedules are omitted because they are not applicable or not required or the
information required to be set forth therein is included in the consolidated
financial statements referenced above in section (1) of this Item 15.3.
    
    ExhibitsThe information on exhibits required by this Item 15 is set forth in the Index to
Exhibits of this Report.
 97




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##### Table of Contents



INDEX TO EXHIBITS
 Exhibit
    
    
    
    Filed Herewith orNumber
    
    Exhibit
    
    Incorporated by Reference3.1
    
    Restated Articles of Incorporation of Centex
Corporation (Centex), as amended
    
    Exhibit 3.1 to Centexs Annual Report on Form 10-K
for the fiscal year ended March 31, 20043.2
    
    Amended and Restated By-Laws of Centex dated May
10, 2007
    
    Exhibit 3.1 to Centexs Current Report on Form 8-K
dated May 16, 20074.1
    
    Specimen Centex common stock certificate
    
    Exhibit 4.1 to Centexs Quarterly Report on Form 10-Q
for the quarter ended September 30, 20064.5
    
    Indenture, dated October 1, 1998, between Centex
and U.S. Bank National Association (as successor
to JPMorgan Chase Bank, N.A.)
    
    Exhibit 4.1 to Centexs Current Report on Form 8-K
dated October 21, 19984.6
    
    Indenture, dated March 12, 1987, between Centex
and JPMorgan Chase Bank, N.A. (formerly Texas
Commerce Bank National Association)
    
    Exhibit 4.5 to Amendment No. 1 to Centexs
Registration Statement on Form S-3 (File
No. 333-72893), filed on May 14, 19994.7
    
    Any instrument with respect to long-term debt,
where the securities authorized thereunder do
not exceed 10% of the total assets of Centex and
its subsidiaries, has not been filed; these
instruments relate to (a) long-term senior and
subordinated debt of Centex issued pursuant to
supplements to the indentures filed as
exhibits 4.5 and 4.6, which supplements have
also been filed with the SEC as exhibits to
various Centex registration statements or to
reports incorporated by reference in such
registration statements, (b) long-term debt
issued pursuant to indentures or other
agreements in connection with certain asset
securitizations involving certain subsidiaries
of Centex in private transactions and (c) other
long-term debt of Centex; Centex agrees to
furnish a copy of such instruments to the
Securities and Exchange Commission upon request10.1
    
    Centex Corporation Amended and Restated 1987
Stock Option Plan*
    
    Exhibit 10.1 to Centexs Quarterly Report on Form
10-Q for the quarter ended September 30, 200610.2
    
    Amended and Restated 1998 Centex Corporation
Employee Non-Qualified Stock Option Plan (1998
Stock Option Plan)*
    
    Exhibit 10.2 to Centexs Quarterly Report on Form
10-Q for the quarter ended September 30, 200610.2a
    
    Form of stock option agreement for 1998 Stock
Option Plan*
    
    Exhibit 10.2a to Centexs Annual Report on Form 10-K
for the fiscal year ended March 31, 200510.3
    
    Amended and Restated Centex Corporation 2001
Stock Plan (2001 Stock Plan)*
    
    Exhibit 10.3 to Centexs Quarterly Report on Form
10-Q for the quarter ended September 30, 200610.3a
    
    Form of stock option agreement for 2001 Stock
Plan*
    
    Exhibit 10.4 to Centexs Current Report on Form 8-K
dated May 16, 200710.3b
    
    Form of restricted stock agreement for 2001
Stock Plan*
    
    Exhibit 10.3b to Centexs Annual Report on Form 10-K
for the fiscal year ended March 31, 2004
 98




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##### Table of Contents



Exhibit
    
    
    
    Filed Herewith orNumber
    
    Exhibit
    
    Incorporated by Reference10.4
    
    Amended and Restated Centex Corporation Long
Term Incentive Plan (LTIP)*
    
    Exhibit 10.5 to Centexs Quarterly Report on Form
10-Q for the quarter ended September 30, 200610.4a
    
    Form of award agreement for LTIP*
    
    Filed herewith10.5
    
    Centex Corporation 2003 Annual Incentive
Compensation Plan*
    
    Exhibit 10.13 to Centexs Quarterly Report on Form
10-Q for the quarter ended June 30, 200310.5a
    
    Form of award agreement for incentive
compensation (2006)*
    
    Exhibit 10.5 to Centexs Current Report on Form 8-K
dated May 16, 200610.6
    
    Amended and Restated Centex Corporation 2003
Equity Incentive Plan (2003 Equity Incentive
Plan)*
    
    Exhibit 10.4 to Centexs Quarterly Report in Form
10-Q for the quarter ended September 30, 200610.6a
    
    Form of stock option agreement for 2003 Equity
Incentive Plan*
    
    Filed herewith10.6b
    
    Form of stock unit agreement for 2003 Equity
Incentive Plan*
    
    Exhibit 10.6 to Centexs Current Report on Form 8-K
dated May 16, 200710.6c
    
    Form of restricted stock agreement for 2003
Equity Incentive Plan*
    
    Exhibit 10.5 to Centexs Current Report on Form 8-K
dated May 16, 200710.6d
    
    Form of non-employee director stock option
agreement for 2003 Equity Incentive Plan*
    
    Exhibit 10.1 to Centexs Quarterly Report on Form
10-Q for the quarter ended June 30, 200610.6e
    
    Form of non-employee director restricted stock
agreement for 2003 Equity Incentive Plan*
    
    Exhibit 10.2 to Centexs Quarterly Report on Form
10-Q for the quarter ended June 30, 200610.7
    
    Amended and Restated Supplemental Executive
Retirement Plan of Centex Corporation*
    
    Exhibit 10.8 to Centexs Annual Report on Form 10-K
for the fiscal year ended March 31, 200310.7a
    
    First amendment to Amended and Restated
Supplemental Executive Retirement Plan of Centex
Corporation*
    
    Exhibit 10.5 to Centexs Quarterly Report on Form
10-Q for the quarter ended June 30, 200610.8
    
    Centex Corporation Deferred Compensation Plan*
    
    Exhibit 4 to Centexs Registration Statement on Form
S-8 (File No. 333-37956) filed on May 26, 200010.9
    
    Amended and Restated Centex Corporation
Executive Deferred Compensation Plan (Executive
Deferred Compensation Plan)*
    
    Exhibit 10.9 to Centexs Annual Report on Form 10-K
for the fiscal year ended March 31, 200610.9a
    
    Form of deferred compensation agreement for
Executive Deferred Compensation Plan*
    
    Filed herewith10.10
    
    Outside Director Compensation Plan*
    
    Exhibit 10.6 to Centexs Current Report on Form 8-K
dated May 16, 200610.11
    
    Centex Corporation Executive Severance Policy*
    
    Exhibit 10.1 to Centexs Current Report on Form 8-K
dated June 8, 200610.12
    
    Centex Corporation Salary Continuation Plan*
    
    Exhibit 10.10 to Centexs Annual Report on Form 10-K
for the fiscal year ended March 31, 200410.13
    
    Centex Comprehensive Medical Plan*
    
    Exhibit 10.11 to Centexs Annual Report on Form 10-K
for the fiscal year ended March 31, 200510.14
    
    Consulting Agreement, dated as of March 31,
2002, between Centex and David W. Quinn*
    
    Exhibit 10.11 to Centexs Annual Report on Form 10-K
for the fiscal year ended March 31, 200410.15
    
    Termination Agreement, dated as of March 31,
2004, between Centex and David W. Quinn*
    
    Exhibit 10.12 to Centexs Annual Report on Form 10-K
for the fiscal year ended March 31, 200410.16
    
    Agreement, dated as of February 23, 2006,
between Centex and Leldon E. Echols*
    
    Exhibit 10.1 to Centexs Current Report on Form 8-K
dated February 24, 2006
 99




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##### Table of Contents



Exhibit
    
    
    
    Filed Herewith orNumber
    
    Exhibit
    
    Incorporated by Reference10.17
    
    Executive Separation Agreement, between Andrew
J. Hannigan and Centex Homes effective March 30,
2007*
    
    Exhibit 99.2 to Centexs Current Report on Form 8-K
dated April 3, 200710.18
    
    Distribution Agreement between Centex, Cavco
Industries L.L.C. and Cavco Industries, Inc.
    
    Exhibit 10.15 to Centexs Quarterly Report on Form
10-Q for the quarter ended June 30, 200310.19
    
    Amendment No. 1 to Distribution Agreement
between Centex, Cavco Industries L.L.C. and
Cavco Industries, Inc.
    
    Exhibit 10.19 to Centexs Quarterly Report on Form
10-Q for the quarter ended June 30, 200310.20
    
    Administrative Services Agreement between Centex
Service Company and Cavco Industries, Inc.
    
    Exhibit 10.16 to Centexs Quarterly Report on Form
10-Q for the quarter ended June 30, 200310.21
    
    Tax Sharing Agreement between Centex and
affiliates and Cavco Industries, Inc.
    
    Exhibit 10.17 to Centexs Quarterly Report on Form
10-Q for the quarter ended June 30, 200310.22
    
    Agreement to Assign Trademark Rights and Limited
Consent to Use Centex Trademarks between Centex
and Cavco Industries, Inc.
    
    Exhibit 10.18 to Centexs Quarterly Report on Form
10-Q for the quarter ended June 30, 200310.23
    
    Amended and Restated Distribution Agreement,
dated as of November 4, 2003, between Centex and
Centex Construction Products, Inc.
    
    Exhibit 99.1 to Amendment No. 3 to Centexs Schedule
13D filed on November 5, 200310.24
    
    Amended and Restated Agreement and Plan of
Merger, dated as of November 4, 2003, among
Centex, ARG Merger Corporation and Centex
Construction Products, Inc.
    
    Exhibit 99.2 to Amendment No. 3 to Centexs Schedule
13D filed on November 5, 200310.25
    
    Credit Agreement, dated July 1, 2005 among
Centex, Bank of America, N.A., as Administrative
Agent, and the lenders named therein
    
    Exhibit 10.1 to Centexs Current Report on Form 8-K
dated July 1, 200510.25a
    
    First Amendment to Credit Agreement, dated May
25, 2006 among Centex, Bank of America, N.A., as
Administrative Agent, and the lenders named
therein
    
    Exhibit 10.2 to Centexs Current Report on Form 8-K
dated June 1, 200610.26
    
    Securities Purchase Agreement, dated as of March
30, 2006, among Centex Home Equity Company, LLC,
Centex Financial Services, LLC and FIF HE
Holdings, LLC. In accordance with the
instructions to Item 601(b)(2) of Regulation
S-K, the schedules to the foregoing Securities
Purchase Agreement are not filed herewith. The
Securities Purchase Agreement identifies such
schedules, including the general nature of their
content. Centex undertakes to provide such
schedules to the Securities and Exchange
Commission upon request.
    
    Exhibit 10.1 to Centexs Current Report on Form 8-K
dated April 4, 2006
 100




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##### Table of Contents



Exhibit
    
    
    
    Filed Herewith orNumber
    
    Exhibit
    
    Incorporated by Reference10.27
    
    Amendment No. 1 to Securities Purchase
Agreement, dated as of July 11, 2006, among
Centex Home Equity Company, LLC, Centex
Financial Services, LLC and FIF HE Holdings,
LLC. In accordance with the instructions to
Item 601(b)(2) of Regulation S-K, the schedules
to the foregoing Amendment No. 1 to Securities
Purchase Agreement are not filed herewith. The
Amendment No. 1 to Securities Purchase Agreement
identifies such schedules, including the general
nature of their content. Centex undertakes to
provide such schedules to the Securities and
Exchange Commission upon request.
    
    Exhibit 2.2 to Centexs Current Report on Form 8-K
dated July 14, 200610.28
    
    Amendment No. 2 to Securities Purchase Agreement
among Centex Financial Services, LLC, Nationstar
Mortgage LLC and FIF HE Holdings, LLC, dated as
of December 20, 2006.
    
    Exhibit 2.3 to Centexs Current Report on Form 8-K
dated December 22, 200610.29
    
    Stock Purchase Agreement, dated as of
January 31, 2007, among Centex Construction
Group, Inc., Centex Corporation, Balfour Beatty,
Inc. and Balfour Beatty plc. In accordance with
the instructions to Item 601(b)(2) of Regulation
S-K, the schedules to the foregoing Stock
Purchase Agreement are not filed herewith. The
Stock Purchase Agreement identifies such
schedules, including the general nature of their
content. Centex undertakes to provide such
schedules to the Securities and Exchange
Commission upon request.
    
    Exhibit 10.1 to Centexs Current Report on Form 8-K
dated February 6, 200710.30
    
    Form of Director Indemnification Agreement*
    
    Exhibit 10.1 to Centexs Current Report on Form 8-K
dated February 14, 200610.31
    
    Form of Change of Control Agreement*
    
    Exhibit 10.2 to Centexs Current Report on Form 8-K
dated February 14, 200612.1
    
    Computation of Ratio of Earnings to Fixed Charges
    
    Filed herewith21
    
    List of Subsidiaries of Centex
    
    Filed herewith23
    
    Consent of Independent Registered Public
Accounting Firm
    
    Filed herewith24.1
    
    Powers of Attorney
    
    Filed herewith31.1
    
    Certification of the Chief Executive Officer of
Centex pursuant to Rule 13a-14(a) promulgated
under the Securities Exchange Act of 1934
    
    Filed herewith31.2
    
    Certification of the Chief Financial Officer of
Centex pursuant to Rule 13a-14(a) promulgated
under the Securities Exchange Act of 1934
    
    Filed herewith32.1
    
    Certification of the Chief Executive Officer of
Centex pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
    
    Filed herewith
 101




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##### Table of Contents



Exhibit
    
    
    
    Filed Herewith orNumber
    
    Exhibit
    
    Incorporated by Reference32.2
    
    Certification of the Chief Financial Officer of
Centex pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
    
    Filed herewith
 
 *Management contract or compensatory plan or arrangement 102




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##### Table of Contents



SIGNATURES
  CENTEX CORPORATIONRegistrantMay 21, 2007
    
    By:
    
    /s/ TIMOTHY R. ELLER

Timothy R. Eller, Chairman of the Board andChief Executive Officer
  May 21, 2007
    
    By:
    
    /s/ TIMOTHY R. ELLER

Timothy R. Eller, Chairman of the Board andChief Executive Officer (principal executive officer)May 21, 2007
    
    By:
    
    /s/ CATHERINE R. SMITH

Catherine R. Smith, Executive Vice President andChief Financial Officer (principal financial officer)May 21, 2007
    
    By:
    
    /s/ MARK D. KEMP

Mark D. Kemp, Senior Vice President  Controller(principal accounting officer)
 Directors:
    
    Barbara T. Alexander, Juan L. Elek, Timothy R. Eller,Ursula O. Fairbairn, Thomas J. Falk, Clint W. Murchison, III,Frederic M. Poses, James J. Postl, David W. Quinn,Matthew K. Rose and Thomas M. Schoewe
 May 21, 2007
    
    By:
    
    /s/ TIMOTHY R. ELLER

Timothy R. Eller,Individually and asAttorney-in-Fact*
 
 *
    
    Pursuant to authority granted by powers of attorney, copies of which are filed herewith. 103